FEASIBILITY STUDY OF D&L LEMON FARM AS AN AGRI-

TOURISM BUSINESS IN NAGUILIAN, LA UNION

LOPEMAE HANA B. BAUTISTA

ANGELICA L. DELA CRUZ
BRENDA M. FLORA
MARY KIMBERLY B. GUAB
JHEMAIMA V. RILLERA

DON MARIANO MARCOS MEMORIAL STATE UNIVERSITY

MID LA UNION CAMPUS
COLLEGE OF MANAGEMENT
SAN FERNANDO CITY, LA UNION

BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION

Major in Financial Management

DECEMBER 2021
 TABLE OF CONTENTS

Page

Title Page …………………………………………………………………….......... i

Table of Contents…………………………………………………………............... ii

List of Figures…………………………………………………………………..….. iv

List of Appendices…………………………………………………………............. v

CHAPTER 1 – THE PROBLEM AND ITS SETTING

Introduction………………………………………………............................ 1

Statement of the Problem………………………………………………....... 3

Scope and Limitation of the Study……………………………………….… 4

Significance of the Study………………………………………………....... 5

Definition of Terms ……………………………………………………....... 5

CHAPTER 2 – RESEARCH METHODS

Research Design …………………………………………………............... 8

Research Locale...………………………………………………….............. 9

Research Respondents…………………………………………………….... 9

Sampling Technique………………………………………………………... 10

Research Instrument…………………………................................................ 10

Data Gathering Procedure...……………………………………………........ 11

Statistical Tools……………………………………………………………... 11

Forecasting Tools…………………………………………………………… 12

Industry Analysis………………………………………………………........ 12

Competitor Analysis…………………………………………………........... 13
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Customer Analysis………………………………………………………….. 14

Market Analysis…………………………………………………………….. 14

Technical Analysis………………………………………………………….. 15

Management Analysis………………………………………………………. 15

Financial Analysis…………………………………………………………... 15

Ethical Consideration……………………………………………………….. 16

References………………………………………………………............................... 17

Appendices………………………………………………………………………….. 18
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Chapter I

THE PROBLEM AND ITS SETTING

Introduction

Lemons have become a popular ingredient in a variety of dishes,

which is surprising given that this extremely citrus fruit is rarely

consumed on its own. Lemon is an elliptical yellow fruit with protrusions

on either side that distinguishes it from the others. One of its several

varieties that are native in Asia may also be round in shape, but are

usually tiny. It is used as an additive rather than a stand-alone food and

also consumed in the form of beverages, like lemonade which is a

perennial favorite (Ekiert, 2020).

Lemons are mostly produced in China, Brazil, the United States,

and Mexico. Due to its desire for a moderate temperature, the major

lemon producing countries are found in the tropical and subtropical

regions. In all of these countries, the cultivated area has remained nearly

constant over the last ten years, while total production has increased

slightly. China is the only country where production has doubled in

comparison to a slight increase in cultivated area (Citrus Value Chain(s):

A Survey of Citrus Industry, 2017).

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Domestic citrus supply in the Philippines is insufficient to meet

local demand. This is due, among other things, to a high incidence of

pests and diseases, poor orchard management, and low adoption of

improved management practices. Meanwhile, imports from China are

filling the void, outperforming locally grown fruits in terms of both cost

and quality (Cagayan Valley eyes “Citrus Capital of the Philippines” ,

2017).

According to World Tourism Organization (2018), tourism has

always been considered as a major driver of socio economic progress. It

generates more foreign and domestic earnings as a result of the

interaction of a large number of international visitors and residents. It is

regarded as an alternative commodity in many countries, including the

Philippines, to aid in economic growth, and it has experienced continued

growth and diversification. Surprisingly, the country improved its travel

and tourism competitiveness ranking in the World Economic Forum

report, rising from 82nd to 74th place in 2013.

The growing tourist demand for new attractions and more exciting

adventures stimulated the improvement of tourism diversification such

as agri-tourism. Agri-tourism, also known as agro-tourism, refers to the

activities that bring visitors to a farm or ranch. Farm tourism has several

economic benefits for the country (Tyson, 2018). Farm tourism sites have

increased the Philippines' tourism potential, as the country is now a top

agri-tourism destination, with foreign visitor arrivals increasing by

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10.24%. From January to May 2018, foreign visitor arrivals totaled 3.177

million, a 10.24 percent increase over the same period in 2017 (Daval,

2019). The Farm Tourism Act of 2014 was enacted as a comprehensive

program for the development and promotion of farm tourism in the

country to accelerate the development of agri-tourism. Then, in 2016,

Senate Bill No. 3002, also known as the Farm Tourism Development Act,

was enacted as R.A. No. 10816, “An Act Providing for the Development

and Promotion of Farm Tourism in the Philippines and for Other Purposes.”

It was included in the Philippine Development Plan for 2017-2022 in

2016. In line with the government's program, the province of La Union

had already set a bold goal of becoming the "Heart of Agri-tourism" in

Northern Luzon, Philippines, by 2025. According to Libongco (2020), La

Union, Davao, and Laguna are among the places with growing farm

tourism, with the number of visitors increasing by about 157 percent to

18,000 in 2017 from 7,000 in 2016.

The La Union Investment Program, which has a Php 25.2 billion

budget from 2018 to 2022, aims to further develop agri-tourism in the

province by assisting small and medium-sized businesses with

equipment and machinery, post-harvest facilities and organic farming,

and road and other infrastructure construction. In contrast to the

traditional site development approach, the province's strategy focuses on

destination development through tourism circuits centered on

community-based agritourism sites. The idea behind tourism circuits is

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to connect all of the different tourism and tourism-related attractions

and services in a region in a systematic manner (PGLU, 2017).

The municipality of Naguilian is one of the nineteen towns plus one

city that comprises the province of La Union. Its name was derived from

the Iloko phrase “Nag-ili-an dagiti gan-ganaet”, which means “a place

where people from other places come to stay”. It is form from Iloko root

word “ili” meaning “town” which was later modified as “Naguilian”.At

present, it has 37 barangays (GovPH, 2016).

Based on Naguilian’s topography, the type of soil and its

capabilities vary. Because of potentials, this municipality is abundant in

agricultural products such as rice terraces in Mamat-ing Norte, Virginia

tobacco and rice in Mamat-ing Sur and Tuddingan among other

products. Naguilian is also coined as the home of the original basi

because of its famous production of fermented basi wine.

D&L Lemon Farm is owned by Mr. Lope R. Bautista and family. In

1994, the proprietor was one of the beneficiaries of 4H Club (Head,

Heart, Hand,Health) program under the Department of Agriculture who

were sent to study in Japan. He was once awarded as an Outstanding

Farmer in the Philippines. This motivated him and his wife to engage in

lemon farming which he regards as a very rewarding experience. In 2005,

he planted one matured lemon seeds from Japan and waited for three

years to grow and bear fruit. After 5 years, he propagated 50 grafted

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lemon trees and this is the time he and his wife finally planned to engage

in lemon farming. The 2,325 sqm. agricultural land that they have at

Brgy. Casilagan Naguilian La Union is now an orchard. In the year 2012,

he again grafted 25 lemon trees and planted it at their land. After waiting

for 5 years, they started to have a fruitful harvest and started to market

their farm produce. At first, there is low demand of lemon in the market.

But as the years pass by, the demand and sales have increased. Their

harvest from the 75 lemon trees is not enough to supply the rising

demand of the market. Luckily, last 2019 the Local Government Unit of

Naguilian with their project which aims to provide livelihood services to

the marginalized/vulnerable sectors and to Micro, Small and Medium

enterprises (MSMEs) in the municipality, they appropriated a 1 hectare

farm lot to Mr. Bautista at the Naguilian Agricultural Complex situated

at Brgy. Cabaritan Sur Naguilian, La Union. Currently 500 lemon trees

and other fruit trees are planted in their farm.

The province of La Union envisions the great potential of both its

agriculture and tourism. The researchers perceived that the feasibility of

D&L Lemon Farm as an Agri-tourism business in Naguilian, La Union

can have a positive impact to the agri-trourism of the municipality and

the province as well. This is a small and yet big help in the province’s

economic growth as it sets to become the agri-tourism center in Northern

Luzon by 2025.
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Statement of the Problem

This study aims to determine the viability of D&L Lemon Farm as

an Agri-tourism business in Naguilian, La Union.

Specifically, the researchers sought to answer the following

questions:

1. What is the feasibility of D&L Lemon Farm in terms of the following

aspects:
a. Market
b. Technical
c. Management
d. Financial

Scope and Limitation of the Study

This study limits its coverage in the Province of La Union. The

researchers will respondents were tourists, and selected Local

Government Unit (LGU) personnel of Naguilian. The information and data

that will be collected for this study will constitute a direct analysis of the

intended market area.

Significance of the Study

Naguilian being one of the first class municipalities of La Union,

this study will help the town's economy and tourism industry. This study
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will be focusing on D&L Lemon Farm as a potential Agri-tourism

business in Naguilian.

This feasibility study would help the proprietor of D&L Lemon

Farm on determining the viability in venturing on Agri-tourism business.

This will also help the municipality to have an opportunity to give

its tourist a variety of ideal environment, ambiance and activities that

will encourage people to visit.

New livelihood programs will also be beneficial to the locals that

will help them to generate income. Therefore, this will positively impact

the economy and tourism industry of Naguilian. This study could help

the municipality to come up with new possibilities by using its full

potential in its area of agri-tourism.

To the researchers, as Business Administration students, this

study will give them broader understanding on the processes and

significance of conducting a feasibility study. Also, additional knowledge

acquired can be useful and relevant for their future profession.

Definition of Terms

Agribusiness. It refers to agriculture-related activities that put farmers,

processors, distributors, and consumers within a system that produces,

processes, transports, markets, and distributes agricultural products.

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Agri-tourism. This are activities that may include vegetable or fruit

picking, sampling of local wines, planting rice or root crops, agricultural

learning and many more.

Citrus Fruit. Any of several edible fruits (as the orange, lemon, and

grapefruit) produced by plants of Citrus.

Farm tourism. This refers to business of attracting visitors to farm areas

generally for educational and recreational purposes while encouraging

economic activities that can provide both the farm and community

additional income.

Lemon. Citrus Limon is a fruit-bearing tree which is an excellent source

of vitamin C and flavonoids, which are antioxidants.

Chapter II

RESEARCH METHODS

Research Design

The researchers will be using a descriptive survey which is a

quantitative method of research. A quantitative research assumes a fixed

and measurable reality. This research approach is designed to gather

data and to provide facts to discover the problems and challenges on the

potential of Agri-tourism business on lemon farming. Consequently, this

research approach will systematic assess all aspects that affect the

financial condition and performance of the proposed business.

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Research Locale

The study will be conducted in the Municipality of Naguilian, La

Union. Naguilian is located at the center of the Province of La Union. It is

bounded in the northwest by San Fernando, the capital of La Union; in

the northeast by the town of Bagulin; in the east by the town of Burgos;

in the southwest by the town of Caba; in the west by the town of Bauang,

and in the southeast by the town of Sablan in the province of Benguet.

Research Respondents

The researchers target to include the tourists, residents of

Naguilian and selected personnel of the Local Government Unit (LGU) in

Naguilian, La Union as respondents in this study. The respondents will

be 18-65 years of age for the researchers to gather data that are reliable.

The inclusion criteria of the study focus on the factors that will let the

participants to be part of the research.

Sampling Technique
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This study will utilize the Simple random sampling. A simple

random sample is a subset of a statistical population in which each

member of the subset has an equal probability of being chosen. A simple

random sample is meant to be an unbiased representation of a group.

Research Instrument

The main instrument that will be used in this study is a survey

questionnaire. The questionnaire will be the main instruments to collect

or gather information from the respondents which are the tourists,

residents of Naguilian and selected personnel of the Local Government

Unit (LGU) in Naguilian, La Union.

The questionnaire will be composed of three parts. . The first part

deals with the demographic profile of the respondents. The second part

deals with the feasibility of D&L Lemon Farm along the areas of market,

technical, management and financial.

The researchers’ intent in the conduct of this study will be clearly

explained and shared with the respondents in order for them to be filled

with information that could help them to properly participate in

answering the questionnaires.

All of the gathered data will not be used for any different matters.

Hence, it will only be used for this research. Only the researchers, their

research adviser and the panel members could access to the results of

the data gathered.

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Before answering the questionnaires, a consent form will be sent to

the respondents. Their participation in this research is voluntary. They

have the rights to withdraw their participation anytime.

All of the questions that will be ask from the questionnaire will be

properly checked by their researcher adviser and panel members before

the distribution of it. Therefore, the safety of the respondents are the

researcher’s priority.

The questionnaire will be subjected to validity and reliability test before

its administration. It will be validated by the experts from the Provincial

Tourism and Agriculture Office of La Union.

A reliability test of questionnaires will be conducted to 30 tourists in

the Municipality of Bauang, La Union. Cronbach’s Alpha will be used as

a statistical tool in order to check the consistency of the instrument.

Data Gathering Procedure

A letter of request and permission to conduct the feasibility study

will be sent to the Office of the Municipal Mayor in Naguilian. After

getting the approval to proceed with the data gathering, coordination

shall be done with the Local Government of Naguilian, La Union where

the respondents reside, for permission to float the questionnaire.

When all agreements are granted from the authorities, the

researchers will personally administer the questionnaire. After which, the

researchers will recheck the questionnaires in order to assure that all the
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data that will be gathered are complete. The researchers will follow

strictly the health and safety protocols in conducting this study.

Statistical Tools

The data gathered will be compiled, tabulated, evaluated, and

interpreted as soon as all the respondents shall have accomplished the

survey questionnaire. The gathered information regarding the

respondents will be tabulated using Microsoft Excel 2016.The

demographic profile of the respondents, will be expressed in terms of

frequency and percentages.

Forecasting Tools

Industry Analysis

Agri-tourism industry presents a unique opportunity to combine

aspects of the tourism and agriculture industries to provide a number of

financial, educational, and social benefits to tourists, producers, and

communities.

To be able to analyze the industry, Porter’s Five Forces Analysis

will be utilized by the researchers. Understanding the potential for

industry growth and evaluate the competitive forces at play in the Agri-

tourism sector and engage in strategic planning that accounts for the

specifics of their industry structure will give better insight into the

internal and external of the business environment.

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Competitor Analysis

The researchers will utilize Competitive Analysis Grid as a

marketing tool. The competitive analysis grid will identify the competitors

and include an assessment of the key characteristics of the competitive

landscape in the Agri-tourism business industry. This will organize the

information about the competitors to see how it stacks up against and

provides ideas for markets to pursue, and, perhaps most importantly,

identifies its primary sources of competitive advantage.

Customer Analysis

The researchers will segment its target market using the responses

from survey questionnaires. It will be based on the respondents’

demographics, behavioral and psychographics factors such as age,

gender, lifestyle, social class, personality, financial capacity, buying

behavior, and preferences in targeting a particular market segment.

Market Analysis

The researchers will analyze the market relative to the demand and

supply data, the evaluation of the market share on Agri-tourism,

forecasting , gap analysis, the analysis of factors that will be affecting the

market and assessment on the most suitable marketing strategies for the

propose Agri-tourism business.

Technical Analysis
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Management Analysis

We will ensure that we hire competent hands to help us build the

business of our dream. The fact that we want to become one of the

leading commercial farms that is also engaged in agro tourism in the

United States makes it highly necessary to build a well – structured

business from the onset.

We will make sure that we hire people that are qualified, honest,

customer centric and are ready to work to help us build a prosperous

business that will benefit all the stake holders.

As a matter of fact, profit-sharing arrangement will be made available to

all our member of staff and it will be based on their performance for a

period of ten years or more. In view of that, we have decided to hire

qualified and competent hands to occupy the following positions;

 Chief Operating Officer

 General Farm Manager

 Agro Travels and Tours Consultant

 Sales and Marketing Executive

 Field Workers

 Front Desk Officer

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5. Job Roles and Responsibilities

Chief Operating Officer:

 Increases management’s effectiveness by recruiting, selecting,

orienting, training, coaching, counseling, and disciplining

managers; communicating values, strategies, and objectives;

assigning accountabilities; planning, monitoring, and appraising

job results

 Responsible for providing direction for the business

 Creating, communicating, and implementing the organization’s

vision, mission, and overall direction – i.e. leading the development

and implementation of the overall organization’s strategy.

 Responsible for signing checks and documents on behalf of the

company

 Evaluates the success of the organization

General Farm Manager

 Responsible for the planning, management and coordinating all

farm activities across the various sections on behalf of the

organization

 Supervise other section managers

 Ensure compliance during project executions

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 Providing advice on the management of farming activities across all

sections

 Responsible for carrying out risk assessment

 Using IT systems and software to keep track of people and progress

of the growth of crops, fishes, birds and animals

 Responsible for overseeing the accounting, costing and sale of farm

produce after harvest

 Represent the organization’s interest at various stakeholders

meetings

 Ensures that farming goals desired result are achieved, the most

efficient resources (manpower, equipment, tools and chemicals et

al) are utilized and different interests involved are satisfied.

Responsible for preparing financial reports, budgets, and financial

statements for the organization

 Defining job positions for recruitment and managing interviewing

process

 Carrying out staff induction for new team members

 Responsible for training, evaluation and assessment of employees

 Oversee the smooth running of the daily farming activities across

the various farming sections.

Agro Travel and Tour Consultant

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 Responsible for booking flight tickets, securing transit visas,

booking for shuttle buses/taxi cabs, car rentals, hotel bookings

amongst many other agro tour services

 Liaise with clients (potential agro tourists) to identify their needs

and to ensure customer satisfaction

 Conduct market research, gather information and negotiate

contracts prior to closing any deals

 Provide feedback and periodic reports to stakeholders

 Propose ideas to improve provided services and agro tourism

quality

 Ensure compliance with insurance, legal, health and safety

obligations

 Cooperate with marketing and PR to promote and publicize agro

related events

 Conduct pre- and post – agro events evaluations and report on

outcomes

 Research market, identify agro tour opportunities and generate

interest

Sales and Marketing Officer

 Identify, prioritize, and reach out to new partners, and business

opportunities et al
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 Identifies development opportunities; follows up on development

leads and contacts

 Writing winning proposal documents, negotiate fees and rates in

line with company policy

 Responsible for handling business research, marker surveys

and feasibility studies for clients

 Responsible for supervising implementation, advocate for the

customer’s needs, and communicate with clients

 Document all customer contact and information

 Represent the company in strategic meetings

 Help increase sales and growth for the company especially as it

relates to attracting agro tourists from within and outside of the

United States of America.

Field Workers

 Serve as tour guides within the farm settlement

 Responsible for feeding cattle and other livestock as instructed by

the supervisor

 Responsible for cleaning the cattle ranch

 Change the water in the water trough / trench as instructed by the

supervisor on a regular basis

 Handles farm implements and machines

 Carries out task in line with the stated job description

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 Handles any other duties as assigned by the farm manager

Client Service Executive/Front Desk Officer

 Welcomes visitors (agro tourists) by greeting them in person or on

the telephone; answering or directing inquiries.

 Ensures that all contacts with clients (e-mail, walk-In center, SMS

or phone) provides the client with a personalized customer service

experience of the highest level

 Through interaction with clients on the phone, uses every

opportunity to build client’s interest in the company’s products

and services

 Consistently stays abreast of any new information on the

company’s products, promotional campaigns etc. to ensure

accurate and helpful information is supplied to clients

 Receives parcels/documents for the company

 Distribute mails in the organization

 Handles any other duties as assigned by the manage

Financial Analysis
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Ethical Consideration

The proponents will clearly observe the following in order to

establish and assure ethical conduct during the feasibility study process:

The proponents will assure that right and proper protocol will be

observed in the administration of the survey questionnaire. The

proponents will make sure that their identities and important

information will be confidential to the proponents and respondents alone.

Letter of Request to conduct the study will be submitted to the

Local Government Unit (LGU) of Naguilian, La Union signed by the team

leader of the feasibility study, noted by the research Adviser and

approved by the Dean of College of Management. Courtesy letter

addressed to barangay chairman of different barangay of the

municipality will be prepared by the researchers. Also, a front letter will

be attached to the questionnaire requesting each respondent of their

consent with regards to the matter.

After the completion of the survey questionnaire, the proponents

will review, tally, compute, and assess the data acquired from the

respondents. The proponents will keep the identity of the people who

responded confidential. All of the findings will be discussed by the

proponents while making sure that the profile of any of the respondents
 24

will not be revealed and will remain confidential to the proponents and

respondents alone.

This feasibility study’s relevant data and documents will be closely

monitored. All of the references and source materials were obtained from

credible sources. Furthermore, the authors of these sources were all

recognized and acknowledged accurately in the reference list of this

study.

REFERENCES

Belen, M. A. (2017, November 15). Cagayan Valley eyes “Citrus Capital of

the Philippines” title. Retrieved from DOST-PCAARRD S&T Media
Services:http://www.pcaarrd.dost.gov.ph/home/portal/index.ph/
quick-information-dispatch/3061-cagayan-valley-eyes-citrus-
capital-of-the-philippines-title
Daval, L. S. (2019, April 26). Farm tourism gaining ground in PHL.
Retrieved from Business World:
 25

https://www.bworldonline.com/farm-tourism-gaining-ground-in-
phl/
Ekiert, H. (2020, February 8). Citrus limon (Lemon) Phenomenon—A
Review of the Chemistry, Pharmacological Properties, Applications in
the Modern Pharmaceutical, Food and Biotechnological Studies.
Retrieved from National Center for Biotechnology Information:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7020168/
GovPH. (2016). About Naguilian, La Union. Retrieved from
https://naguilianlu.gov.ph/aboutus
Libongco, R. H. (2020, January 8). SEARCA Names PH as One of the
World’s Top Agri-Tourism Destination. Retrieved from
https://www.businessnews.com.ph/searca-names-ph-as-one-of-
the-worlds-top-agri-tourism-destination-20190430/
Muhammad Imran Siddique, E. G. (2017, June 20). Citrus Value
Chain(s): A Survey of Citrus Industry. Retrieved from Intechopen:
https://www.intechopen.com/chapters/56485
PGLU. (2017, July 17). Strategic Tourism Development Plan Of The
Province Of La Union For Cy 2018-2025. Retrieved from
https://isacenter.org/la-union-province-commits-to-real-change-
through-agritourism-strategy/
Tyson, D. (2018, July 17). Retrieved from The National Agricultural Law
Center: https://nationalaglawcenter.org/overview/agritourism/
WTO. (2018, April 23). Tourism – an economic and social phenomenon.
Retrieved from World Tourism Organization:
https://www.unwto.org/why-tourism