ESTABLISHMENT OF AN OYSTER MUSHROOM FARM IN UBAY, BOHOL: A FEASIBILITY STUDY

75

INTRODUCTION
We are about to bring the treasure of turning the bulk of our agro-industrial wastes into business opportunities (www.philstar.com).

In the Philippines, agriculture is one of the top industries. Agriculture is considered as an important pillar in the Philippine economy. Experts are quite busy for new scientific methods to be used for our agricultural productions. Oyster mushroom production is one of their agricultural means. Oyster mushrooms are usually grown in tropical forests even in some temperate places. Here in the Philippines, oyster mushrooms are cultivated for food purposes. It is documented and well-known type of an edible mushroom.

Oyster mushrooms have a savory and palatable taste. We can complement this oyster mushroom to our different home-made dishes. Oyster mushroom has abundant health nutrients. Its health benefits include antioxidant and anti-bacterial properties. Vitamin D is also present in oyster mushrooms for bones. Since it provides us calcium. Oyster mushrooms provide protein, iron, potassium, and zinc which are good for our immune system and vitamins like B1, B2, C, folic acid, and niacin for our metabolism (http://www.cairnsmushrooms.com.au/nutrition.html). These mushrooms are known for Beta-Glucan. Such compounds have anti-tumor properties.

According to a former Secretary of Department of Agriculture, Mr. Proceso Alcala that 90% of the total mushroom consumed in Philippines (including oyster mushroom) is imported from other countries. Only 10% of the total consumed mushrooms are locally cultivated. The Philippines has an abundant amount of agro-industrial wastes as materials suitable for mushroom production. A blog from Holiday Philippines notes that mushroom production is one of the progressive business opportunities if it will be cultivated locally because it targets the basic needs. On the contrary, present cultivation is limited due to insufficient knowledge and funding from the government about its cultivation (jmpmushroom, 2013).

In 2014, Department of Agriculture provides a community-based oyster mushroom project in Bohol for food and livelihood purposes. Still rare growers of oyster mushroom can be found in the province of Bohol that is why there is a limited supply of oyster mushroom in the markets. It is usually seen in the supermarkets not even in local markets

As noted, the number one tourists in Bohol are Koreans followed by Americans and then Chinese (Tourism statistics, 2016). They are people who love eating mushrooms. Thus, it creates another potential in the market from our foreign visitors who eat mushrooms.

It prompts us to make a project feasibility study of an oyster mushroom production in Ubay, Bohol because of the following situations:
An advertisement from Department of Agriculture Region VII catches our attention that it is profitable to engage in an oyster mushroom production by using agro-industrial wastes. Ubay is an agricultural municipality and it showcases different agricultural products. One of its major products is the production of rice. Thus, it produces rice straws every after harvesting season necessary for oyster mushrooms to grow. After harvesting the palay, it is a common practice of the farmers in Ubay, Bohol to burn the rice straws. Thus, it causes environmental destruction without thinking the benefits of using these rice straws. Taking into consideration, it is an eco-friendly agricultural venture without using any hazardous chemical.

Ubay has its Bohol Experiment Station (BES) in connection with the Department of Agriculture who will assist us with this project. The availability and accessibility of technicians and fully-equipped personnel of this agency (BES) are willing to lend their expertise and assistance for this project. Ubay has improved farm to market roads to transport local products going to the markets.

Theoretical Background
This study is anchored in the following theories and concept – theory on Project Feasibility Study, Production theory and Agribusiness concept.

A blog posted by Marin (2012) at www.trumanmox.com cites the importance of project feasibility study in business. It is used to test the viability of the business concept and idea. Its purpose is to give us rationale of the business venture whether to pursue it or not. The business aspects are analyzed after considering that it studies not from the past but the trends in the present markets. Having project feasibility study for businesses reduces the risk for failure.
Production is defined as the process of converting inputs (raw materials) into an output. Production is an economic activity that generates income. It is an activity directed towards the satisfaction of the peoples' wants through an exchange (J.K. Hicks, 2013). According to this theory, it has four basic factors of production namely land, labor, capital and entrepreneurship.

A Research by Jamandre defines agribusiness as "the sum total of all operations involved in the manufacture and distribution of farm supplies; production operations on the farm; and the storage, processing, and distribution of farm commodities and items made from them (www.openuni-clsu.edu.ph/openfiles/modules/ab710/lesson1.doc). Agribusiness identifies enterprises that take place within the farm gate as well as offering products to different consumers. It involves processes such as the acquisition of production inputs in order to make products by processing further and sell such products.

Agribusiness may consist of all food production enterprises and the ultimate consumers with marketing as a big factor to consider in generating profit. It is a system of moving products and by-products to different consumer sectors. As stated by Custodio in his book "Agribusiness Concepts and Dimension (2003)," identifies subsystems within a system. These are essential for the whole agribusiness system. The Input subsystem: This is the first subsystem where all other subsystems originated. It is where components (inputs) of raw materials are produced and utilized. The Production subsystem: Under this system, those outputs will be processed further for the production of raw materials to be used as an input in creating another product. The Processing subsystem: The outputs from preceding subsystem will be consumed to transform into varied products. The transformation depends upon the process being applied; it can be simple or sophisticated (Rolando, 2009).The Marketing subsystem: This subsystem deals with the transport of the produced goods from producers to end-users (one place to another). Lastly, The Support Subsystem: it where necessary players in the business venture are involved just like the government, state policies and other institutions that affect the operations of the business.
Related Literature
According to Raut (2011), 300 BC is the earliest period of oyster mushroom cultivation and it starts to produce internationally first from China as early as in 900 AD. France initiates new techniques and approaches for mushroom cultivation until such time it spreads throughout the European countries (Raut 2011:8).
People from different countries have a different point of views when it comes to the word "mushroom". For Romans, it is concerned as "food of gods". In ancient times, oyster mushrooms are used by Greek warriors for their strength. (http://www.creativecommons.org/licenses/by/3.0/).

China has been known as the abundant producer of mushrooms including oyster mushrooms. In 2008, their exports reach a total of 1.7 billion USD. About 40 % of the world production comes from China but 95 % of China's production is consumed in their country (Sustainability journal, 2014).
Some chefs and kitchen masters find that oyster mushroom when cooked has ham-like aroma, mild and soft texture, and indulging flavor. Later on, the products they produced are intended for commercial purposes like for healthy diet and medicinal help (http://www.mushroom-appreciation.com).

Cellulose and lignin present in the substrates are vital nutrients for oyster mushrooms to grow. Logs and hardwoods are the natural environments of these oyster mushrooms. Due to the advancement in technology, they are produced at a higher yield of production in an artificial environment but with natural design supplemented with the nutrients needed (Stamets, 1993).
Experts create new varieties through breeding of oyster mushrooms results to have different colors, could it be creamy-white color or gray. Some varieties are pink and yellow. These oyster mushrooms grow in a partially decomposed organic matter. Oyster mushrooms are unlike plants they do not have green leaves. Therefore, they do not need warmth from sunlight for them to have food on their own through photosynthetic processes. They are dependent on the substrates they have for them to create food in their own way (decaying organic matter). These mushrooms will convert complex organic matter into a simple form through breaking down and absorbing such matter from the substrates (Raut, 2011).
Fresh oyster mushrooms are sensitive to its environment. It can easily be dehydrated if they are placed in direct sunlight or by using the mechanical dryer as compared to other mushrooms types. Fresh oyster mushrooms take its life span for a week after it has been harvested. That is why they need to undergo food processing for production before the lapse of the shelf span or else, cook them immediately in order to avoid spoilage of the mushroom fruits (Sahbaz et al., 2000; Giri and Prasad, 1997).
This oyster mushroom cultivation is introduced in Nepal in the year 1981. They use chopped straws and plants' remains for cultivation. Technologies for oyster mushroom production are distributed to farmers. Their production method produces quick returns of investments. Poor farmers are given equal opportunities for mushroom cultivation even if in small scale areas to supplement their incomes and alleviate from poverty (Manandhar, 2014).
A research by Nilesh Pakale in his "Mushroom Growing in India (Mushworld)", states that most growers in India are self-employed and operating small-scale farms. Inadequate knowledge and experiences about oyster mushroom production are identified from them that alter their biological enterprises. Since growers are just too complacent, they suffer a low return of investments from mushroom ventures they have. At that state, results to affect the supply and demand that takes place in the market segmentation for oyster mushroom production. Therefore, the market price of the oyster mushroom fluctuates. Their market is exclusively concentrated by the local mushroom growers and cultivators (Pakale, 2014:29).
Related Studies
Substrates are the base for the mycelia to live. Substrates and other environmental factors that must be present are necessary for our spawn to grow and develop so that it will harvest good fruiting bodies of the oyster mushrooms. Since substrates are vital for the oyster mushroom growth, it is crucial to decide what kind of substrates to be used. That is why different substrates are being studied by the experts to determine the best substrates that are biologically efficient.

Studies conducted by Tan (1981) revealed that cotton waste is the best substrate for the cultivation of Pleurotus. Cereal Bran from mild grains is added to the cotton waste substrate to energize the mycelia and increase the yield of mushroom (Kinugawa et al., 1994). It is found out that sawdust and sugar cane residue are suitable substrates for growing oyster mushroom (Ahmed, 1998).

An investigation conducted by Zhang et. al (2001) to determine the effects of the rice straw and wheat straw on oyster mushrooms. The discovery of biological efficiency and substrate degradation was also known. The ground straw as compared to chopped straw yielded higher production and it was efficient. The growth of mushroom on the ground straw is five days shorter than the chopped. However, it is found out that there is a decrease in yield by using grounded straw as a substrate. Rice straw yields 10% more than wheat straw under the same variables in doing the experiment.

Obodai et al. (2002) reported that it is needed for sawdust substrate to undergo the composting process to disintegrate and separate the cellulose and lignin components of the wood for the release of essential elements for mycelium. Accordingly, saw dusts are not totally rich in cellulose and lignin in sawdust. The sawdust substrates have low amount protein for the cultivation of mushroom and it needs additional nitrogen, phosphate, and potassium to support the mycelia.

An investigation conducted by Baysal (2003) in paper waste supplemented with rice husk, chicken manure, and peat for Pleurotus cultivation. The said substrate with 20% rice husk yields 350.2 grams on its actual production. Silva et al. (2005), an insufficient amount of available nitrogen (N) in the substrate of wood components is often considered as a limitation for the mycelia to utilize the mushroom substrate.

Pleurotus are widely cultured in Asia and Europe countries because it has high biological efficiency and no need for costly production (Mane et al., 2007). A study by Moonmoon et al., (2010) about Oyster mushroom on sawdust and rice straw in Bangladesh shows that on sawdust it attains 73.5 % efficient and it is better than on rice straw substrate.

A study by Aguilar et. al (2010) shows significant differences between the substrates. The study reveals that rice hull is the best substrate for oyster mushroom as compared to dried banana leave and coconut husk. The reason on such study is that chemical compound and properties essential for a mushroom to grow are not utilized. Rice hull or rice husk manifests positive results for all parameters evaluated. Using coconut husk, the spawn of oyster mushroom has slow progress for growth.

The starting capital is just minimal and not too costly for oyster mushroom production in Nepal. Mushroom houses are just made up of indigenous and locally produced materials. Even manpower is accessible within the village. Agro-industrial wastes like wheat and paddy straws are also acquirable within their villages as their raw materials for mushrooms. Manandhar finds that oyster mushroom prices are unstable and marketing strategies are not good. The price depends upon the demand and supply of available oyster mushrooms (www.Mushworld.com).
Moreover, it is the most suitable way to earn a living for the poor and landless farmers in Nepal. Oyster mushroom does not need wide spaces for cultivation. Some farmers are just using their own houses in growing oyster mushrooms. Thus, oyster mushroom production contributes to the betterment for their ways of living (Manandhar, 2014:18).
A study by Dr. Lolita D. Viyar on "Oyster Mushroom Production in Laguna State Polytechnic University - Siniloan Campus (2014)", they use saw dust from furniture and woodcarving shops as their main component in the preparation of their substrates. According to her, the demand for oyster mushroom has tremendously increased and some demands are not satisfied. Viyar adds that the supply of mushroom is very minimal at present and it desires them to expand the production capacity of the project since there is an indication of increasing demand in the locality. The study does not include the only production of fresh harvests but also includes developing processed-food being addressed by them.
Other than production aspect, utilization of used up or spent oyster mushroom substrates are evaluated for their efficacy as bio-fertilizers and substrates for vermi-compost. Accordingly, it gains popularity among farmers and food enthusiasts because of the social, economic and environmental impact of producing oyster mushrooms.

THE PROBLEM
Statement of the Problem
The main objective of the study is to ascertain the viability of establishing an Oyster Mushroom Production in Bulilis, Ubay, Bohol.
Specifically, it will investigate the feasibility of the project in terms of the following aspects:
1. Management
2. Marketing
3. Technical
4. Financing and Profitability
5. Socio-economic aspect of the study
The study will come up with thorough conclusions and recommendations for its implementation.
Scope and Limitation of the Study
The study covers the data available gathered in libraries, periodicals, journals and online sources. Researchers visit government agencies like the Department of Agriculture, Provincial Agriculture Office, Agricultural Promotion Center, Department of Trade and Industry, Department of Science and Technology in Bohol Province for conducting relevant interviews. However, a representative from the group gathers data and relevant information from Bohol Experimental Station and local government unit in Ubay considering the distance from its capital city. Researchers conduct critical reviews of the data gathered. Tasks and duties are divided among the researchers to lessen the hassle and burden. The researchers pay equal contributions for expenses of the study. The study will be conducted for two consecutive semesters in academic year 2017-2018.

Assumption
The study is based on the assumption that it is feasible to establish an oyster mushroom farm in Ubay, Bohol.

Significance of the Study
The following are the importance of the study:
To the Proponent of the Study. It will serve as her guide for the viability of establishing an oyster mushroom production. The study will serve as a guide on how to start up the business on what technical, management, financing, and marketing strategies to apply. It will serve as direction to make sound decisions in every action to be taken
To Possible Investors. This study gives logical view to those possible investors for enabling them to interpret if they will invest or not.

To the Government. It is an essential tool to the government for keeping on the right track and decisions to be made for implementing programs of the same nature.
To the Future Researchers. The study will also serve as reference material for undergraduates, graduates students and researchers who will be doing future feasibility studies of the same nature.

Executive Summary
Management Feasibility
The proposed business is a sole proprietorship. The farm will require a manager / cashier who plans, organizes and controls the whole business. The manager / cashier will implement the business plans, strategies, training and proposals, and responsible in handling the sales receipts and disbursements. The proposed project will need the services of a bookkeeper for preparation of the needed business financial statements and submit reports to regulatory agencies. The management will hire qualified and competent personnel. All in all, the proposed project will require 16 person with an annual labor cost of Php 1,055,500. The project is feasible in terms of management aspect because there is an access to human resources in the place that highly match the requirements of the needed personnel and at the same time, Human Resource Policies and Working Policies will be implemented in the administration of the business. The work will be assigned to different employees according to their schedule.
Marketing Feasibility
The KABUTEHAN FARM will be feasible as to its marketing aspect. The target market will comprise the permanent vegetable vendors in Talibon, Tagbilaran, Tubigon, Candijay and Ubay who are 96.25% willing to patronize the proposed oyster mushroom farm and also 86.67% for hotels, resorts and restaurants in Panglao, Dauis and Tagbilaran City.
The combined projected demand of oyster mushrooms from vegetable vendors, resorts, hotels and restaurants in kilos will be computed and reveals that 63,298.68 kilos in 2018; 67,861.20 kilos in 2019; 72,808.72 kilos in 2020; 77,948.74 kilos in 2021 and 83,560.43kilos will be the demand for oyster mushrooms in 2022.
The farm will have market share of 50% on the total demand. The farm will adapt marketing programs and practices regarding the product, price, place, promotion, people, process and packaging.
Technical Feasibility
The proposed oyster mushroom farm will also be feasible in terms of its technical aspect. This is because the project location will be located in a very strategic area where one of its major products is the rice production, thus, there is an abundant supply of agricultural wastes which will be used in the production such as rice straws. Bohol Experiment Situation (BES) is situated near the project site where the availability and accessibility of technicians and fully-equipped personnel will be found. Also, there is an abundant supply of water because there is an irrigation system nearby. Machineries and equipments to be acquired are also available within the province. Legal requirements like business permit, licensing and other regulatory mandates will be followed.
Financial Feasibility
The proposed project will have a total project cost of Php 3,520,225.68 which will be financed by the proponent itself. The proposed business has an average projected net income for 5 years of Php 3,030,368.8. As a result, the farm will give an average return on investment of 86.08 %. It gives an average return on sales of 56%. This indicates that the business operation is profitable. The profitability test further shows that the return on equity will be desirable. It has an average return of 33%.
The balanced sheet shows that the total assets will increase Php 5,184,056.39 in the first year of operation to Php 14,647,007.81 at the end of five year, at an average of Php 9,602,179.31. The total project cost of Php 3,520,225.68 will be recovered in two (2) years and three (3) months.
Socio-economic Feasibility
Once the farm becomes operational, it will cater the demand of the consumers that will give them quality products. It solves problems on insufficient supply in the market. It is indeed a good contribution to the society in need of better options when it comes to food consumption. It will help the current and incoming sellers to gain additional source of income.
In addition, people in the locality will be hired to operate the business and this will help decrease the number of unemployed people. It will generate additional revenue for the government through taxes, licenses and permits and this will help improve the economic situation in the country. These earnings could help the local government for the betterment of the community. The farm believes that it can help the community by welcoming new business opportunities in the future. Therefore, the proposed project will be feasible.

PROJECT BACKGROUND
Project Proponent
Mrs. Anita B. Felisilda is the proponent of this project. At present, she manages her farm focusing rice production and has agri-industrial enterprise in their barangay. She is a graduate of Diploma in Agricultural Technology. She acquired enough knowledge and skills from her experiences and trainings to run this type of business. According to her, she will finance the project cost solely from her own resources.
Business Name
The business will be named "KABUTEHAN FARM" which connotes from the noun "KABUTE" which is the Tagalog term for mushroom and with the suffix -HAN. Combining the word KABUTE and suffix –HAN creates another word KABUTEHAN. Hearing this word "KABUTEHAN" means "GOODNESS".
Business Location
This oyster mushroom farm will be located in Purok 7, Brgy. Bulilis, Ubay, Bohol. It will be placed in the idle land of the proponent for almost 1 hectare. Ubay is 110 kilometers away from Tagbilaran City. The town is known for being abundant showing different agricultural products one of its bests is rice production. The barangay Bulilis is situated after barangay San Pascual and barangay California from the national road. Figure 1 shows the location map of the town of Ubay.

Fig 1. Location Map
Form of Business Organization
The proposed business will operate under a sole proprietorship form of business organization. The proponent choose this type of business organization because of a faster and easier creation of the business, the legal requirements and restrictions are minimal and she will be having a free hand in the decision making. Most of all, the proponent will not be sharing the income to anyone and it has a tax advantages.

MANAGEMENT ASPECT
Good management is necessary to every business organization. Efficient and effective management serves as the backbone of successful organizations. Management is the art of planning, organizing, directing and controlling human efforts, financial and physical functions to attain the desired goals. It utilizes organizational resources through the efficient use of scarce resources and done in the best and cheapest way to accomplish organizational objectives.
Organizational Chart
The figure and table shown below presents the organizational chart of the management flow as well as the position, qualification and responsibilities of the personnel involved in agri-business.
MANAGER / CASHIERPRODUCTION OFFICER / DRIVER FFFDDDDRIVERBOOKKEEPERFARM WORKERS / UTILITY MENTECHNICIANMANAGER / CASHIERPRODUCTION OFFICER / DRIVER FFFDDDDRIVERBOOKKEEPERFARM WORKERS / UTILITY MENTECHNICIAN
MANAGER / CASHIER
PRODUCTION OFFICER / DRIVER FFFDDDDRIVER
BOOKKEEPER
FARM WORKERS / UTILITY MEN
TECHNICIAN
MANAGER / CASHIER
PRODUCTION OFFICER / DRIVER FFFDDDDRIVER
BOOKKEEPER
FARM WORKERS / UTILITY MEN
TECHNICIAN

Fig. 2. Organizational Chart

Personnel Matrix
The proposed project requires the services of the following personnel in the administrative personnel. The rest of the personnel are in the technical aspects.

Position
Qualifications
Responsibilities
No. of Personnel
Status
Salary and Benefit
Manager / Cashier
Must be at least 30 years old
A graduate of management or any business related course
Knows the basic of accounting.
Have experience in supervising farm works
Plans, organizes and control the whole business
Implements business plans and strategies
Responsible in handling sales receipt and disbursement

1
Regular
Php 10 ,000.00 per month

With 3% increase every 2 years

Plus:
13th month pay
SSS
PhilHealth
Pag-ibig

Monthly Rice Allowance
Bookkeeper
A graduate or non-graduate of accountancy or any related accounting related courses
Must be responsible
Performs accounting services
Records all business transactions and prepares financial statements
Submit reports to regulatory agencies

1
Retainer
Retainer's Fee of 2,000.00 per month


Human Resource Policies
The proposed business will employ human resources policies to publish the uniform sets of rules by which employees must abide. These human resource policies are considered as conditions in pursuance to their employment within the organization. The policies contain employment guidelines, attendance and time records, wage and salary, benefits and loans, health and safety, and employment termination and retirement (See Appendix G).
Working Policies
The following are the work policies in the administration and operation of the KABUTEHAN FARM"
Working Hours. KABUTEHAN FARM is open daily for business from 7:30 in the morning until 5:30 in the afternoon.
General Policies. The following implementing rules and policies are to be strictly adhered by all employees.
1. Attendance. It is encouraged that every employee should report to the workstation at least 10 minutes before the start work.
2. Leave of absence. In case of planned leave, the employee should inform the manager 2 days before the scheduled leave. In case of emergency or sickness leave, employee should inform the manager of the whereabouts of the employee
3. Real time waste works or unnecessary activities are not allowed.
4. Wear the clean and decent clothes. No wearing of undershirts and sleeveless blouses.
5. No personal business transaction is allowed inside the premises unless authorized by the owner.
6. No smoking and drinking before and during work time.
7. Work carefully always.
8. Concentrate on your scheduled works.
9. Put a smile in your face and be respectful at all times.
10. Be loyal to your work as well as to your employer.
MANAGEMENT PROPOSALS
In order to maintain a competitive edge in the marketplace, the proposed farm through administrative personnel must set aside a time for training and development of their employees. The management will consider the training of employees in their current jobs and to develop more their skills in the workplace. Some of the proposals include the following:
1. Deliver Effective Training – The manager and production officer will conduct quarterly briefing, trainings and workshops in order to enhance and improve the skills of their teams. Learning objectives must be set to ensure the right set of employees. This can be hand's – on trainings, seminars or meeting with the group.
2. Employee Assessment Program - The management will assess the whole organization by using the behavioural assessment of the employees to which includes the following traits:
Work Ethics
Behavior
Attitudes
Commitment
This evaluation will be one of the best assessment solutions to select, retain and develop employees. This proposal allows the employee's opportunity to develop and contribute to the farm's long term objectives. This assessment solution helps to identify the strengths and areas of opportunity for development.
3. Conducting Employee Opinion Survey – The management will set criteria to survey the employees in the workplace to focus on specific issues like evaluating the work climate of a certain employee. It is a method to understand their needs, views, suggestions and recommendations in the organization. Administrative and Production personnel will be involved in the decision making and commitments that affect them.
4. Team Building Events – The employees may encounter another employee that creates conflicting priorities, personality styles and potentially wrong member in the team. The team leader must determine the overall goals of the organization and the employee will give feedback to determine their perceptions on the issue. This is the management's duty to create team building sessions to uphold strong ties between them. This team building will take into account the personality and help group to find ways to achieve their goals.
Office Supplies & Equipment
Shown below are the list of office supplies, machineries and equipments and the office furniture and fixtures to be used in administration of the proposed business. It entails the corresponding material descriptions, unit, the quantity, their unit cost and their total cost.
Office Supplies
Unit
Quantity
Unit Cost
(Php)
Total Cost (Php)
Stapler and Staple wires
Pieces
2
88.00
176.00
Pen
Box (50 pieces)
1
150.00
159.00
Pencil
Box (50 pieces)
1
250.00
250.00
Adhesive tape & dispenser
Piece
1
175.26
175.26
Push pins
Box
1
145.00
145.00
Puncher
Piece
1
75.60
75.60
Fastener
Box
1
75.25
75.25
Columnar
Pieces
10
20.00
200.00
Notebook
Pieces
5
10.00
50.00
Writing Pads
Pieces
5
15.00
75.00
Post-it Notes
Pieces
5
5.00
25.00
Folders
Pieces
10
5.50
55.00
Wall clock
Pieces
1
145.65
145.65
Scissors
Pieces
2
30.00
60.00
Clips
Box
1
23.75
23.75
Glue sticks/ Glue
Bottle
3
38.95
116.85
Rubber bands
Pack
1
5.60
5.60
Correction tapes
Pieces
2
18.65
37.30
Envelopes
Pieces
10
3.75
37.50
Long Bond Paper
Ream
3
155.45
466.35
Short Bond Paper
Ream
3
145.50
436.50
Markers
Pieces
2
35.00
70.00
Calculator
Pieces
1
179.99
199.99
Ink
Pieces
2
91.25
182.50
Tissues
Pack
4
63.00
252.00
Logbook
Pieces
3
40.00
120.00
Bulk Bottled Water Refills & Accessories
Pieces
1
985.00
985.00
TOTAL

Php 4 591.10

Office Machineries & Equipments
Unit
Quantity
Unit Cost (Php)
Total Cost (Php)
Computer
Piece
1
17 500.00
17 500.00
Printer
Piece
1
2 499.50
2 499.50
Telephone
Piece
1
1 344.00
1 344.00
TOTAL

Php 21 343.50

Office Furnitures and Fixtures
Unit
Quantity
Unit Cost (Php)
Total Cost (Php)
File Organizer Cabinet
Piece
1
2 716.25
2 716.25
Whiteboards/ Noticeboards
Piece
1
288.00
288.00
Ceiling Fan
Piece
1
565.00
565.00
Chairs/ Plastic chairs
Pieces
5
195.00
975.00
Office Table
Piece
1
989.00
989.00
TOTAL

Php 5 533.25

Personnel Budget
The personnel budget covers the salaries and wages, benefits of the personnel in the administration. The personnel budget increases every 2 years as presented in financial assumption.
Table 1. Salary of Personnel in the Administration (for one year)
Designation
No. of Employees
Rate per Month
No. Of Months
Annual Salary
Manager/Cashier
1
10,000
13
130,900
Bookkeeper
1
2,000
12
24,000
Total
2
12,000
-
154,000

MARKETING ASPECT
Marketing is the activity, set of institutions, and processes for creating, communicating, delivery, and exchanging offerings that have value for customers, clients, partners, and society at large. (American Marketing Association-Board of Directors, 2012). It is a management process in which goods or services are delivered from one place to customers.
Market Description
Oyster Mushroom is newly introduced to some Boholano farmers way back in 2014. Thus, these products are not common to people or in the market. According to our interview to all mushroom growers, they sell their products in their respective public market / vegetable vendors. Some are in their respective communities. The oyster mushroom growers supply resorts, hotels and restaurants in Bohol.
Thus, the target markets of our propose oyster mushroom farm will be the following:
Vegetable vendors of the following municipalities / city
Jagna
Talibon
Tubigon
Ubay
Tagbilaran City
Resorts, Hotels and Restaurants in the following municipality / city
Dauis
Panglao
Tagbilaran City
Demand Analysis
The researchers get a record from LGU – Market administrators to determine the number of vegetable vendors to our target markets in the past 4 years.
Table 2. Historical Number of Vegetable Vendors
Year
Jagna
Talibon
Tubigon
Ubay
Tagbilaran
Total
% of Increase
2014
39
27
32
20
93
211
0%
2015
45
30
32
23
101
231
9.48%
2016
47
35
26
25
111
244
5.63%
2017
50
33
29
30
120
262
7.38%
Source: LGU – Market Administrators, 2017
Based on the historical number of vendors, the annual average percentage of increase of the past four years is 7.50%, which we computed as follows:
Average Increase in the number of Vendor = 9.48% + 5.63 % +7.38% 3 years.
The researchers get another list of number of resorts, hotels and restaurants from Department of Tourism in coordination with Bohol Tourism Office in the past 4 years.

Table 3. Historical Number of Resorts, Hotels and Restaurants

Year
Dauis
Panglao
Tagbilaran
Total
% of Increase
2014
10
50
25
85
0
2015
14
57
25
96
12.94%
2016
16
55
23
94
-2.08%
2017
15
59
25
99
5.32%
Source: Department of Tourism and Bohol Tourism Office, 2017
Therefore, the annual average percentage in resorts, hotels and restaurants in Dauis, Panglao and Tagbilaran City is 5.39% = 12.94% +-2.08% + 5.32% 3 years.
Based on the historical data gathered from their respective LGU – Market administrators as shown in Table 2, we computed that there is an annual increase of 7.50 % on the total number of vegetable vendors. We use the average increase in the demand projection for the next 5 years as follows:
Table 4. Projected Number of Vegetable Vendors
Year
Population of Vegetable Vendors
Average Population Growth
Projected Annual Population
2018
262
20
282
2019
282
21
303
2020
303
23
326
2021
326
24
350
2022
350
26
376

Based on the historical data gathered from Department of Tourism and Bohol Tourism Office as shown in Table 3, it shows that the number of resorts, hotels and restaurants has increased by an annual average of 5.39%. This become our basis for the computation of the annual projected increase of resort, hotels and restaurants for ht next 5 years as shown below.
Table 5. Projected Number of Resorts, Hotels and Restaurants
Year
Population of Resorts, Hotels and Restaurants
Average Population Growth
Projected Annual Population
2018
99
5
104
2019
104
6
110
2020
110
6
116
2021
116
6
122
2022
122
7
129

Demand Projection
For the vegetable vendors, the projected annual demand is based on the result of questions number 7, 8 and 12 in our survey questionnaire for vegetable vendors specifically those respondents who specified that they will patronize the product, the frequency and quantity of purchase. Below is used to compute the demand and its projection for next 5 years.
Vegetable Vendor's Demand = (Population of vegetable vendors) x (% of patronage) x quantity
x frequency x number of months

Vegetable Vendor's Demand = (Population of vegetable vendors) x (96.25%) x 5 kilos
x 4 times per month x 10 months

Table 6 summarizes the five-year projected demand of the vegetable vendors for the oyster mushrooms.
Table 6. Projected Demand of Oyster Mushroom for Vegetable Vendors
Year
Vegetable Vendor's Annual Demand (in kilos)
2018
54,285
2019
58,327.5
2020
62,755
2021
67,375
2022
72,380

For the resorts, hotels and restaurants, the projected annual demand is based on the result of Questions number 6, 7 and 11 in resorts, hotels and restaurant's questionnaire specifically those respondents who specified that they will patronize the product, the frequency and quantity of purchase. Below is used to compute the demand and its projection for the next 5 years.
Resorts, Hotels and Restaurant's Demand = (Population) x (% of patronage) x quantity x
frequency x number of months

Resorts, Hotels and Restaurant's Demand = (Population) x (86.67%of patronage) x 5 kilos x
2 times per month x 10 months

Table 7 summarizes the five-year projected demand of resorts, hotels and restaurants for oyster mushrooms.
Table 7. Projected Demand of Oyster Mushroom for Resorts, Hotels and Restaurants
Year
Resorts, Hotels and Restaurant's Annual Demand (in kilos)
2018
9,013.68
2019
9,533.70
2020
10,053.72
2021
10,573.74
2022
11,180.43

Table 8. Combined Total Demand (in kilos)
Year
Vegetable Vendors
Resorts, Hotels and Restaurants
Total
2018
54,285
9,013.68
63,298.68
2019
58,327.50
9,533.70
67,861.20
2020
62,755
10,053.72
72,808.72
2021
67,375
10,573.74
77,948.74
2022
72,380
11,180.43
83,560.43

Supply Analysis
Oyster mushroom growers started producing last 2014. There are about 12 community and station based oyster mushroom growers who supply the entire Province of Bohol as to the records of Bohol - APC. The researchers get a record of historical oyster mushroom supply in the past 4 years from Bohol Agricultural Promotion Center.

Table 9. Historical Supply of Oyster Mushroom (in kilos)
Year
Total Supply
% of Increase
2014
989
0%
2015
1,523
53.99%
2016
1,440
-5.45%
2017
1,559
8.26%
Source: Bohol – APC, 2017
Based on the historical data of oyster mushroom supply gathered from Bohol – APC, the annual average increase in supply of oyster mushroom in the entire Province of Bohol is 18.93%, which was computed as follows:
Average Increase in the Entire Province of Bohol = 53.99% + -5.45 % + 8.26% 3 years.
Table 10 shows the projected supply in the next 5 years.
Table 10. Projected Supply of Oyster Mushroom (in kilos)
Year
Total Supply
Average Increase in Supply
Total Projected Supply
2018
1,559.00
295.12
1,854.12
2019
1,854.12
350.98
2,205.10
2020
2,205.10
417.43
2,622.53
2021
2,622.53
496.44
3,118.97
2022
3,118.97
590.42
3,709.39

Demand – Supply Analysis

The proposed project can only cater 50 % market share considering the current and projected supply as well as the production capacity and the financing from the proponent.
Table 11 presents the demand, supply and the gap between them and the market share.
Table 11. Demand – Supply Gap (in kilos)
Year
Demand
Supply
D – S Gap
Market Share
Total Share
2018
63,298.68
1,854.12
61,444.56
50%
31,649.34
2019
67,861.70
2,205.10
65,656.60
50%
33,930.85
2020
72,808.72
2,622.53
70,186.19
50%
36,404.36
2021
77,948.74
3,118.97
74,829.77
50%
38,974.37
2022
83,560.43
3,709.39
79,851.04
50%
41,780.22

Projected Sales Volume

Table 12 show the annual projected sales volume. There are 5% of spoilage are expected to be deducted from total share to get the total net sales volume.
Table 12. Projected Sales Volume (in kilos)
Year
Total Share
Percentage of Spoilage
2018
31,649.34
5%
30,066.87
2019
33,930.85
5%
32,234.31
2020
36,404.36
5%
34,584.14
2021
38,974.37
5%
37,025.65
2022
41,780.22
5%
39,691.21

Projected Sales Income
Table 13. Projected Sales Income
Year
Price per kilo with 5% Increase (Php)
Total Sales Income
(Php)
2018
30,066.87
200.00
6,013,374.00
2019
32,234.31
210.00
6,769,205.10
2020
34,584.14
220.50
7,625,802.87
2021
37,025.65
231.53
8,572,548.75
2022
39,691.21
243.11
9,649,330.06

Proposed Marketing Programs and Practices
The proposed marketing practices of KABUTEHAN FARM will be based on the 7 P's of Marketing.
Product. The KABUTEHAN FARM will give importance to their target markets especially their customers by supplying good quality of products. Customers can talk to the staff especially if there are problems arise in providing the products. The management shall address the problems right away. The management must maintain good customer care in entertaining their requests and concerns.
Price. The current selling price of fresh oyster mushroom in the market ranges from Php 250 to Php 300 depending on their sources of supply. The price of the proposed oyster mushroom farm are based on standard prices of the most oyster mushroom growers which is Php 200 per kilo which is competitive enough against the other existing mushroom growers. This price is the most preferred amount according to our survey respondents in question number 9 for vegetable vendors with 60% who favoured this amount and question number 8 for resorts, hotels and restaurants with 93.33% who respond to this amount. The management decides to provide an increase price of 5% annually.
Place. To ensure good production of oyster mushrooms the production area is located in Purok 7, Brgy. Bulilis, Ubay, Bohol. The place is good for oyster mushrooms to grow because it is free from any possible contaminants that might affect the growth of the oyster mushrooms. The place is surrounded with trees that give cooling environment for the oyster mushrooms. The proposed project shall be placed in a good location wherein it is accessible to the raw materials needed for oyster mushroom production.
With regards to the target markets, they are very accessible to any means of transportations.
Promotion. The management shall administer a committee composed of 5 persons. This group of persons will be oriented by the management because they are going to launch and promote these oyster mushrooms to the target markets by conducting business development forum in the different target markets especially vegetable vendors. This will be conducted because there is a need to determine and established markets for consumptions. The management shall coordinate with Department of Agriculture through Bohol – APC to promote the oyster mushrooms and encourage customers to patronize the buying of such products. The seminar will take for half-day in every target market and must be done within a month in the first year of operation. To encourage the number of participants, they will be informed that there are sample to be given after the seminars.
To increase the target consumers and potential buyers, the management will employ print advertisements like flyers which will be given in the target markets. these flyers will be distributed at the end of every quarter. The management will create an official social media accounts to cater the needs of the customers and prospect buyers in accessible way like facebook, instagram, twitter and the like. According to Bohol – APC, majority of the usual consumers tend to be of the older age. To address the issue, there will be a radio advertisement. It will be aired for 30 seconds every day at 7:00 a.m food for a month at every end of the quarter. This advertisement will be aired at DYRD – Bohol AM station on a contractual basis.
For our target resorts, hotels and restaurants, the management shall hire product and sales promotion team composed of 5 persons in behalf on the management to conduct proposal and negotiations to our target resort, hotel and restaurants in Dauis, Panglao and Tagbilaran City. This is to be done in 1 week within the first month of operations of the business. A budget also will be allocated to support the marketing programs.
People. All staff and personnel will always be oriented the proper etiquette of taking care our customers. The personnel are expected to be friendly, approachable, hardworking and courteous in entertaining the target customers even with their co-workers.
Process. The KABUTEHAN FARM will always consider the quality control for an efficient and effective process in producing oyster mushrooms. The management shall ask assistance in Department of Science and Technology to ensure the desired outcome of the processes. Also, quality control in production area must be observed
Packaging. A good packaging for the products will be used at the same time to ensure the best quality of the products. The management shall ask advices from Department of Science and technology on what would be the best packaging design to ensure the quality, cleanliness and freshness of the product.

Exhibit A

KABUTEHAN SAMPLE FLYER

Marketing Budget
Table 14 shows the marketing budget to be incurred in the first year of operation. The budget focuses on promotion aspects of the proposed project.
Table 14. Marketing Budget
Marketing Programs
Budget Amount (Php)
Frequency
Total Budget
(Php)
Vegetable Vendors Information Awareness Campaign
56,750.00
once every year
56,750.00
Flyers and Posters
750.00
Every quarter
3,000.00
Radio Advertisement
10,000.00
Every quarter
40,000.00
Outsourcing of a team for sales promotion
30,000.00
1 week
30,000.00
GRAND TOTAL

129 750.00

TECHNICAL ASPECT
This aspect covers the study of the product, production processes, alternative processes, material requirements, technological assistance, project site, building and other facility layouts, manpower requirements and the production budget. This covers the project description of the proposed oyster mushroom farm.
Product Description
Oyster mushroom (Pleurotus sp.) is an easily cultivated edible mushroom. The caps of the oyster mushrooms are milky white with a silky surface and grow up to 10 cm in diameter. The cap of oyster mushroom are broad and fan or oyster shape. The gills are white to cream color. The spore print is white lilac gray. It has firm and thick flesh. This mushroom is considered as rapidly growing and extremely aggressive fungus.
One cup of oyster mushroom provides about 28 calories and 35 grams of fat, 2.85 grams of protein, and 2 grams of fiber. The same amount provides 361 mg of potassium, 0.095 grams of vitamin B6 and 33 ug of folate. The nutrients of oyster mushroom vary when accompanied with meat or bread.

Production or Operation Process
Flow of Production
Disposal and ReproductionStoring to Mushroom HousesProduction Period / HarvestingPackingDeliveryGrain Spawn ProductionGrain Spawn transfers to Fruiting BagsRice Wash Agar MediaInoculationSteaming of Fruiting BagsShredding of Rice Straws and Mixing with Saw dustsPacking of Fruiting BagsDisposal and ReproductionStoring to Mushroom HousesProduction Period / HarvestingPackingDeliveryGrain Spawn ProductionGrain Spawn transfers to Fruiting BagsRice Wash Agar MediaInoculationSteaming of Fruiting BagsShredding of Rice Straws and Mixing with Saw dustsPacking of Fruiting Bags
Disposal and Reproduction
Storing to Mushroom Houses
Production Period / Harvesting
Packing
Delivery
Grain Spawn Production
Grain Spawn transfers to Fruiting Bags
Rice Wash Agar Media
Inoculation
Steaming of Fruiting Bags
Shredding of Rice Straws and Mixing with Saw dusts
Packing of Fruiting Bags
Disposal and Reproduction
Packing
Delivery
Grain Spawn transfers to Fruiting Bags
Inoculation
Shredding of Rice Straws and Mixing with Saw dusts

Fig. 3. Flow of Production
Rice Wash Agar is a mixture to be made for mycelia expansion. This process must be done within the laboratory room to be free from contamination. This agar serves a food nutrient's to be eaten by the fungi for production. In preparing, we need to have 1 kilo of milled rice. Ensure that this rice is in good quality. The rice is to be washed with 1 liter of distilled water. The rice wash solution is to be boiled in a clean pot using electric stove. On its boiling point, we need to add 1 tablespoon of white sugar and 2 gelatine bars. The media is now ready. We need sterilized bottle to be filled with the agar we made. The bottles are to be filled with 50ml each. It is estimated we can make 30 bottles for 1 liter of rice wash agar.
The filled bottles are to be pasteurized using our autoclave at 120 degrees Centigrade for 30 minutes. After that, is has to be cooled by laying it horizontally in a cool-dry place.
Inoculation
Since we made our Rice Wash Agar, farm worker assigned for Inoculation Process must acquire a freshly harvest oyster mushroom fruit from Bohol Experiment Station. This process must be done within the laboratory. The personnel assigned in this process must observe cleanliness and wear appropriate attire inside the laboratory. Now, the person is ready for inoculation.
The fresh oyster mushroom fruit must be placed in a petri dish to ensure proper handling. The personnel must light the alcohol lamp for sterilizing the inoculation blade and to heat up the working place to avoid contamination. The personnel must prepare 70% solution alcohol to wipe the fresh oyster mushroom fruit. The personnel must get a tissue from the innermost portion of the fruit. The size of the tissue is like a grain of rice. This tissue is to be placed at the center of the rice wash agar. These bottles are to be placed in a dry, cool and dim storage area. After three weeks, the bottles are colonized with mycelia growth.
This Grain Spawn Production is prepared for multiple mushroom seeds. The personnel in the laboratory must prepare 10 kilograms of unmilled rice. The personnel must observe the quality of this unmilled rice. This unmilled rice is to be soaked for overnight. After soaking, it has to be washed with clean water and remove the grain once it floats. Then, these grains are to be boiled and it must be ensured that it is 30% cooked. After that, it has to be drained using out sterilized strainer and to be put in a clean cotton cloth for drying and consider maintaining the moisture content. The personnel may use Manila paper for drying.
Once it is cool, it has to be packed in 150 grams each using the Polypropylene bags (PP). These packages are to be sealed with rubber bands. These must be sterilized using our autoclave at 110 degrees Centigrade. These packs are to be cooked. These matured mycelia from our rice wash agar are now ready to transfer in our grain spawn and it takes another 3 weeks for production within the packed grains.

Shredding of Rice Straws and Mixing with Saw Dusts
Good quality must be observed in selecting and choosing rice straws to be used as substrates. These rice straws are to be shred with our biodegradable shredder into pieces. The farm worker must shred desired kilograms of rice straws to compensate the number of fruiting bags needed in production. After shredding, it has to be soaked overnight to maintain the moisture content of our substrate. After soaking, it has to be drained and let it dry considering the desired moisture content.
After that, the rice straws are to be mixed with saw dust substrates with a ratio of 70% rice straws and 30% saw dust and in every 10 kilograms of the substrates to mixed with 100 grams agricultural line to maintain the acidity of our substrates.
Once the substrates are ready, the farm worked are going to pack the substrates in Polypropylene bags (PP) weighing 1 kilogram each. These fruiting bags are to be sealed with cotton and rubber band to hinder the entrants of contaminants.
After packing of the fruiting bags, it is now ready for steaming to ensure that the substrates are free from contaminants. Contaminants are to be killed using this process because contaminants might ruin the production of fresh oyster mushroom fruits. Steaming will run for 2 hours from boiling point at 110 degrees Centigrade. After steaming, the substrates are to be placed in a clean, dry and cool environment.

Grain Spawns transfer to Fruiting Bags
We have prepared grain spawns and our fruiting bags are ready for production of oyster mushroom. This process will be done at the laboratory, because this is very crucial in transferring the mushroom seeds to the fruiting bags. This, the personnel in laboratory room must disinfect the environment using anti-bacterial fresheners or even 70% solution alcohol. The personnel must prepare the alcohol lamp, the grain spawns from Polypropylene bags (PP) and Puller. The personnel must sterilize the puller using the alcohol lamp. Each fruiting bag is to be filled with 10 grains of spawns. It has the same process in transferring the spawn to the fruiting bags. After this, the fruiting bags will be sealed with cotton on its mouth with clean paper and rubber band to secure the quality of producing the fruits.
Each fruiting bags is filled with spawns. The farm workers are going to transfer the bags to the designated mushroom houses. These fruiting bags are to be hanged in their rooms. We need to wait for almost 1 month, the mycelia colonize entire fruiting bags.
After a month, it is expected that the mycelia will colonize the entire fruiting bags. Then, the farm workers will be assigned to detach the sealer in the tip of the fruiting bags for them to grow at the hole and produce the oyster mushroom fruits. These mushroom fruiting bags are estimated to produce fruits for 3 months from the day of first harvest. Not all fruiting bags will produce the oyster fruits at the same day. Some fruiting bags will bear fruits and some fruiting bags are in the other day. There is an alternate production of oyster mushroom fruits but the farm will harvest the fruits every day.
Packing of Oyster Mushroom Fruits
Since, there is an everyday harvest, the personnel farm workers will be assigned to pack the fresh harvest fruit in a clean cellophane. The packing of oyster mushroom fruits will depend upon the number of kilos ordered from customers and the target markets. The farm has standard kilo to be packed and sealed and that is 1 kilogram per pack.
Delivery
Immediate delivery to our customers and target markets is one of concerns of the farm for them to meet their demand. It is to ensure customer care and satisfaction of our product. Upon pending of delivery, the farm has cooler where oyster mushroom fruit are to be stored to maintain the good quality before delivery.
Disposal of Fruiting Bags and Reproduction
Three months is the average production and harvesting period for our fruiting bags. After that period, we have to replace our fruiting bags. The substrates inside the fruiting bags are to be decomposed because they are agro-industrial waste and can be used as a fertilizer to other plants. The farm will implement proper disposal of used Polypropylene bags (PP) to conserve and protect the environment. They will not burn the Polypropylene bags (PP) but these will be used as pots of any plants in the form to maintain the protection of the environment.
For reproduction of another mushroom seeds and fruiting bags we need to repeat the steps and process mentioned above. There is no more lag of time for producing mycelia, for making spawn and for preparing fruiting bags because in the 3 months of producing, harvesting period, the farm workers will utilized the time for them to prepare the replacements of fruiting bags. This technique will be implemented to guarantee continuous supply of the oyster mushroom fruits.
Table 15. Production Schedule (in kilos)
PRODUCTION SCHEDULE (in kilos)
Planting
Harvesting
2018
2019
2020
2021
2022
January
April
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
February
May
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
March
June
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
April
July
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
May
August
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
June
September
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
July
October
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
August
November
3,516.59
2,827.57
3,033.70
3,247.86
3,481.69
September
December
3,492.42
2,827.58
3.033.66
3,247.91
3,481.63
October
January

2,827.57
3,033.70
3,247.86
3,481.69
November
February

2,827.57
3,033.70
3,247.86
3,481.69
December
March

2,827.57
3,033.70
3,247.86
3,481.69
Total

31,625.34
33,930.85
36,404.36
38,972.37
41,780.22

Replenishment Schedule
Table 16. Replenishment Schedule
Year 1
Month
First Batch
Second Batch
Third Batch
January
Preparation of RWA and Mother culture, Raw Materials: Rice Straws and Saw Dust

February
Grain Spawn Production or Mushroom Seeds Preparation

March
Preparation of Substrate, Mixing of Substrate, Processing of Fruiting Bags, Steaming and Transferring of Mushroom Seeds

April
Production of Fresh Oyster Mushroom Fruits, Temperature Control, Contamination Control, Pest Control Spraying, Harvesting, Packing and Delivery, Disposal of Fruiting Bags at the end of its life

May


June

Preparation of Substrate, Mixing of Substrate, Processing of Fruiting Bags, Steaming and Transferring of Mushroom Seeds to Fruiting Bags

July

August

September

Preparation of Substrate, Mixing of Substrate, Processing of Fruiting Bags, Steaming and Transferring of Mushroom Seeds to Fruiting Bags
October

November

December

The table 16 above shows the replenishment schedule. It entails the processes of producing oyster mushroom and how operations will run all throughout the year. The schedule covers different processes that begin with the first process until the harvesting of fresh oyster mushroom and until the end of its life. You will notice in the year 1 of its first quarter, there is no production of fresh oyster mushrooms yet. Month of January until March are period for preparation of mother culture, subculture and preparations of fruiting bags. It approximately consumes 3 months before fruiting bags can actually produce and harvest oyster mushroom fruits. For continuous production, you notice in the month of April to June is the production and harvesting period of first batch of fruiting bags before it ends. The same period in the month of April to June will be used for preparation of mother culture, subculture and preparations of fruiting bags for next production. So, by the end of the first batch another batch will batch will produce oyster mushroom. Therefore, there is no lagging of time in producing and harvesting unlike in the first quarter of the year since it is the beginning period. Thus, in the following years, there is continuous and undisrupted production and harvesting of the mushroom fruits to compensate the demand in the markets.
Production Capacity
The operations occur in the production aspect are operating at average and normal capacity. The farm's operations and processes depends the number of the fruiting bags to be used in every batch of production. Its aim is to make 45 000 of fruiting bags in every batch before it ends. Every fruiting bag has to make 1 kilogram of substrates before it is filled with the sub-tissue culture / spawn. Every preparation of rice wash agar can accommodate 20 bottles/ glass jars/ petri dishes for mycelia production. Each bottle has 40 to 50 ml of rice wash agar. These 20 bottles will be filled and colonized by the mycelia or the fungi which are more than enough for subculture production using the 30% cooked palay. These 20 bottles of mycelia is more than enough for 10 kilograms of grains. The grains are to be packed in 150 grams. The mother culture can accommodate almost 100 packs of spawn of subculture. Those subcultures are also more than enough for 44 000 fruiting bags in the mushroom houses. Every mushroom houses has 4 000 fruiting bags which are to be placed for production. It has about 20 mushroom houses.
Machineries and equipment are also operating at normal capacity. Agricultural trailer / tractor has 800 kilograms capacity for hauling agricultural substrate like rice straws and saw dusts. Biodegradable shredder has normal capacity of shredding 600 kilograms per day. Since the farm has 2 shredders, it can accommodate almost 1 200 kilograms of rice straws every day. The autoclave machine can accommodate 20 bottles per load and 25 to 30 load of grains for subculture preparation. The pneumatic machine can carry 1700 fruiting bags in every 2 hours of streaming and process. While a delivery van can accommodate 250 kilograms per delivery.
Alternative Production Process
In preparing a media for our mother culture, instead of Rice Wash Agar, we can use and make Potato Dextrose Agar (PDA). This PDA is expensive as compared to our Rice Wash Agar because of the commercial potatoes to be bought in the market but with the same effect as to mycelia growth.
For substrates aside from rice straws and saw dust we can also use the dried banana leaves and rice hull as another agro-industrial wastes needed for preparing the fruiting bags. These dried banana leaves and rice hull are locally available near the proposed project site.
One of the concerns of establishing an Oyster Mushroom Farm is brownout. There are times when brownout may occur unexpectedly. A prolonged brownout is detrimental and may hinder the processes in the farm. Therefore, in order to address this problem in brownout, the management will let the farm workers to manually chop the rice straws instead of an automatic electric biodegradable shredder. For prolonged brownout, a standby power generator will be rented until the back of the power supply for continuous processes and production.

Technology and Technical Support
The table below shows different government agencies that can assist and advice the proponent of our proposed business in securing permits and licenses, registering the business, acquiring machineries and equipment to be used, and other technical assistance.
Table 17. Technology and Technical Assistance
Type of Assistance
Office/Establishment
Address/Tel. Nos./ Email
Trade business management, business name, registration and renewal.
Department of Trade and Industries (DTI)
One stop business centre, Provincial Capitol Building/ 2nd floor FCB Bldg. CPG Avenue, Tagbilaran City.
Tel. (038) 411-3302, 411-3533, 411- 3236.
Technical Assistance and Seminars
Dept. of Agriculture (DA),
Bohol Experiment Station(BES) and
Bohol APC
Near BMCI Hospital for DA Tagbilaran City.
Rey Pamugas

Gabi Ubay, Bohol for BES
Helen Bantilan
09077978573

Near City Hall Building for APC , Tagbilaran City
Gina Olaguir
09070480498

Technological Inquires and Assistance for Machines And Equipment.
Packaging Advice
Department of Science and Technology (DOST)
Tagbilaran City
09075434689
Nutritional Value and Facts,
Barcode Inquires
Bureau of Food And Drugs
Cebu City, Cebu
09355592865

Bill of Materials

Project :
SB-01 : Storage Building

Location:
Ubay Bohol

ITEM NO.
MATERIALS DISCRIPTION
UNIT
QUANTITY
UNIT PRICE
(Php)
TOTAL COST
(Php)

A. Walls and Columns

101
Coco Lumber (4''x 4'' x 6m)
Pcs
4

50.00
200.00
103a
Portland Cement
Sack
20

249.00
4,980.00
102
nails #4
Kgs
1

30.00
30.00
102(1)
nails #3
Kgs
1

100.00
100.00
102(2)
nails #2
Kgs
1

90.00
90.00

B. Truss and Ceiling

103
Roof
Pcs
24

300.00
7,200.00
104
Insulation

36

30.00
1,080.00
105a
Coco Lumber ( 2''x 2'' x 6m)
Pcs
34

30.00
1,020.00
105b
Pcs
10

35.00
350.00
105c
Pcs
14

66.00
924.00
106
Plywood 1/4'' (1.2m x 2.4 m)
Pcs
17

266.00
4,522.00

C. Masonry Works

103
CHB 4''
Pcs
100

19.95
1,995.00
108
Sand
m3
1

1,050.00
1050.00
109
Gravel
m3
0.5

1,170.00
585.00

C. Labor

1

20,000
20,000

TOTAL
44,126.00

Project :
MH-00 : Mushroom Houses

Location:
Ubay Bohol

ITEM NO.
UNIT
QUANTITY
UNIT PRICE
(Php)
TOTAL COST

A. Walls and Columns

101
Pc
6

50.00
300.00
103a
Portland Cement
Sack
5

249.00
1,245.00
102
nails #4
kg
1

30.00
30.00
102(1)
nails #3
Kg
1

100.00
100.00
102(2)
nails #2
Kg
1

90.00
90.00


103
Roof
Pc
56

300.00
16,800.00
104
Insulation

50

30.00
1,500.00
105a
Pc
42

30.00
1,260.00
105b
Pc
20

35.00
700.00
105c
Pc
14

66.00
924.00
106
Plywood 1/4'' (1.2m x 2.4 m)
Pcs
12

266.00
3,192.00

C. Masonry Works

108
Sand
m3
0.5

1,050.00
525.00
109
Gravel
m3
0.5

1,170.00
585.00,

D. Labor

1

20,000
20,000

TOTAL
47,251.00

Project :
SB-FB : Storage Building for Finished fruit bags

Location:
Ubay Bohol

ITEM NO.
UNIT
QUANTITY
UNIT PRICE
(Php)
TOTAL COST

A. Walls and Columns and Partitions

101
Pcs
4

50.00
200.00
103a
Portland Cement
Sack
20

249.00
4,980.00
102
nails #4
Kg
1

30.00
30.00
102(1)
nails #3
Kg
1

100.00
100.00
102(2)
nails #2
Kg
1

90.00
90.00


103
Roof
Pcs
24

300.00
7,200.00
104
Insulation

36

30.00
1,080.00
105a
Pcs
46

30.00
1,380.00
105b
Pcs
10

35.00
350.00
105c
Pcs
14

66.00
924.00
106
Plywood 1/4'' (1.2m x 2.4 m)
Pcs
37

266.00
9,842.00

C. Masonry Works

103
CHB 4''
Pcs
100

19.95
1,995.00
108
Sand
m3
1

1,050.00
1,050.00
109
Gravel
m3
0.5

1,170.00
585.00

D. Labor

1

20,000
20,000.00

TOTAL
49,806.00

Project :
MO-00 :Management Office

Location:
Ubay Bohol

ITEM NO.
UNIT
QUANTITY
UNIT PRICE
(Php)
TOTAL COST
(Php)


101
Pcs
6

50.00
300.00
103a
Portland Cement
Sack
35

249.00
8,715.00
102
nails #4
Kg
1

30.00
30.00
102(1)
nails #3
Kg
1

100.00
100.00
102(2)
nails #2
Kg
3

90.00
270.00


103
Roof
Pcs
24

300.00
7,200.00
104
Insulation

36

30.00
1,080.00
105a
Pcs
60

30.00
1,800.00
105b
Pcs
20

35.00
700.00
105c
Pcs
14

66.00
924.00
106
Plywood 1/4'' (1.2m x 2.4 m)
Pcs
72

266.00
19,152.00

C. Doors and Windows

107
Wooden Door
Set
3

3,200.00
9,600.00
108
Windows
Set
4

3,212.00
12,848.00

D. Masonry Works

108
Sand
m3
2

1,050.00
2,100.00
109
Gravel
m3
1.5

1,170.00
1,755.00

E. Labor

1

40,000
40,000

TOTAL
106,574.00

Project :
LAB-01 : Laboratory

Location :
Ubay Bohol

ITEM NO.
UNIT
QUANTITY
UNIT PRICE
(Php)
TOTAL COST


101
pcs
4

50.00
200.00
103a
Portland Cement
sack
50

249.00
12,450.00
102
nails #4
kgs
1

30.00
30.00
102(1)
nails #3
kgs
1

100.00
100.00


103
Roof
pcs
8

300.00
2,400.00
104
Insulation
M
15

30.00
450.00
105a
pcs
8

30.00
240.00
105b
pcs
12

35.00
420.00
106
Plywood 1/4'' (1.2m x 2.4 m)
pcs
5

266.00
1,330.00

C. Doors and Windows

107
Sliding Glass Door
set
1

3,200.00
3,200.00

D. Masonry Works

108
Sand
m3
3

1,050.00
3,150.00
109
Gravel
m3
3

1,170.00
3,510.00
109a
Rebars
kgs
120

1,100.00
132,000.00

E. Electrical Works

110
duplex wire
box
1

1,950.00
1,950.00
111
Light Switch ( one gang )
pcs
1

67.00
67.00
111a
socket ( three gang )
pcs
1

150.00
150.00
112
Flexible Pipe
M
3

370.00
1,110.00
112a
PVC pipe (6 m )
pcs
3

190.00
570.00
113
Flourescent Light
pcs
1

370.00
370.00
F. Labor

1

60000
60000

TOTAL
223,697.00

The tables above present the description of material with their corresponding unit, quantity, unit price and the total cost in constructing the administrative building, storage room, laboratory and 20 mushroom houses.
Total Cost for Admin. Building, Storage room, Laboratory and the Mushroom Houses
Building
Description
No
Total Cost
SB-01
Storage Building
1
44,126.00
MH-Nos
Mushroom House
20
945,020.00
SB-FB
Storage House for Fruit Bags
1
49,806.00
MO-00
Management Office
1
106,574.00
LAB-01
Laboratory
1
223,697.00

Excess

200,000.00
Total Cost
1,569,223.00

Utilities
Utilities include water, electricity and communication in the business. Here presented is the nominal cost of utilities that will be consumed in the proposed project
Table 18. Annual Utility Cost
Utility
Sources
Unit Cost (Php)
Consumption Rate
Total Cost (Php)
Electric Power
Boheco II
10/kwh
5400 kwh
54,000
Water
San Pascual Waterworks
10/cu. M
4800 cu. M
48,000
Communication and Telephone
Smart, Globe
1200

14,400
Transportation
Ceres Lines
250

3,000
Power Generator
Rental
3000/mo

6,000
Total

125,400

There is a standard electric consumption in production machinery and equipment for every use. Not all machineries and equipment will be used at a time There will be a series of use for machinery and equipments to conserve electricity. An average of 280 cu. m of water will be used in the farm to minimize the cost for water supply.

Gasoline, Oil and Lubricants, Repair and Maintenance
Table 19. Annual Gasoline, Oil and Lubricant, Repairs and Maintenance

Expenses
Sources
Unit Cost (Php)
Consumption
Total (Php)
Gasoline
Shell/Petron/Caltex
42/liter
12600 liter
529,200
Oil and Lubricants
CRU Hardware Supply
500/month
12 mos.
6,000
Repair and Maintenance
----------
2500
12 mos.
30,000
Total

565,600

The table above shows the amount and schedule expense of Gasoline, Oil and Lubricants and Repair and Maintenance The monthly budget for Gasoline amounts to 105 liters per month; while the Oil and Lubricants amount to Php 500 per month. The monthly cost for Repairs and Maintenance of machineries, equipment and other facilities amounts to Php 2 500 per month.
Production Machineries and Equipments, and Furniture and Fixtures
The tables below show the different production machineries and equipment, and furniture and fixtures to be purchased that will cater the needs of these machines and equipment to meet the production schedules and operations.
Production Machineries and Equipments
Unit
Quantity
Unit Cost
(Php)
Total Cost
(Php)
Electric Stove
Pc
1
1,680.00
1,680.00
Air conditioner
Pc
1
7,000.00
7,000.00
Saw
Pc
1
135.00
135.00
Autoclave
Pc
1
13,500.00
13,500.00
Weighing Scale
Pc
1
299.75
299.75
Pneumatic Boiler/ Sterilizer
Pc
1
359,797.00
359,797.00
Biodegradable Shredder
Pc
2
85,000.00
170,000.00
Delivery Truck
Pc
1
155,000.00
155,000.00
Tractor
Pc
1
85,000.00
85,000.00
Chillers/ Coolers
Pc
2
8,000.00
16,000.00
Electric Sealer
Pc
2
1,189.50
2,379..00
Weighing Scale (10 Kilos)
Pc
1
1,050.00
1,050.00
TOTAL

Php 813,300.75

Production Furnitures and Fixtures
Unit
Quantity
Unit Cost
(Php)
Total Cost
(Php)
Table
pc
1
845.00
845.00
Chair
pc
2
195.00
390.00
Glass Cabinet
pc
1
2,685.00
2,685.00
White Board
pc
1
250.00
250.00
TOTAL

Php 4 170.00

Materials Handling Design & Equipment
The farm will use a tractor / agricultural trailer to transport the raw materials purchased from various suppliers to the storage area. We will use glass bottles where we will put the oyster mushroom tissue for the needed time to propagate the said tissue. Built-in cabinets will be used to store those mother cultures. Plastic trays will play an important role for transporting the spawn to the mushroom houses for planting and the same will be utilized for harvesting the fruits to the packaging area. Coolers will serve as storage for packed fresh oyster mushroom. Moreover, the delivery truck will be used as a tool in disposing the finished product to the target markets.

Raw Materials and Supply Requirements
The tables below present the necessary raw materials / inventory and supply requirement in producing oyster mushrooms. It has the material description, unit, unit cost and the total cost.
Raw Materials
Unit
Quantity
Unit Cost (Php)
Total Cost
(Php)
Bugas Pinagaling
(Bukid Rice)
kg
20
40.75
815.00
3 Gulaman Bars
bar
20
12.00
240.00
1 liter Distilled Water
liter
5
23.00
115.00
3 tablespoon sugar
kg
½
22.00
22.00
Tipasi nga humay
kg
40
20.00
800.00
PP Bags
pck
1 760
34.95
61,512.00
PVC Pipe
m
283
143.00
40,469.00
Rubber bands (100pcs/pack)
pck
1 760
10.00
17,600.00
Rice Straw
kg
200,000
7.00
200,000.00
Sawdust
kg.
60,000
2.00
120,000.00
Agricultural Line
kg
2,000
20.00
40,000.00
TOTAL

Php 481,573

Production
Supplies
Unit
Quantity
Unit Cost
(Php)
Total Cost
(Php)
Bottle (Tanduay Lapad)
bttle
50
2.00
100.00
PP Bags (6x12) 100 pcs./ pack
pck
4
34.95
139.80
PVC Pipe
m
4
145.00
145.00
Rubber bands (1 pcs.)
pc
400
25.00
100.00
Cloth (Cotton)
m
5
23.75
118.75
Aluminum Foil
roll
8
49.00
392.00
Rubbing Alcohol (70% solution)
liter
4
157.50
630.00
Alcohol Lamp
pc
3
55.00
165.00
Surgical Blade/ Inoculation Needle
set
1
360.00
360.00
Petri Dish/ Platiko
pc
10
100.00
100.00
Measuring Cups
pc
6
17.00
102.00
Lab Gown
pc
3
150.00
450.00
Plastic Gloves
pck
1
130.00
130.00
Face Mask
pc
4
10.00
40.00
Hair Net
pc
4
6.50
26.00
Laddle
pc
6
23.75
142.50
Nylon (No. 40)
m
100 000
275.00
275.00
Gloves
pc
5
100.00
500.00
Shovel
pc
5
200.00
1,000.00
Tray
pc
10
68.00
680.00
Alcohol Lamp
pc
10
55.00
550.00
Weighing Scale
pc
3
500.00
1,500.00
Pump Sprayer
pc
10
845.00
8,450.00
Plastic Cellophane (10x30) (100's)
pck
50
66.85
3,342.50
Cellophane Bags (Jumbo) (24x30)
pck
20
189.30
3,786.00
Cartons (48x36x24)
pc
200
5.00
1,000.00
Printed Logo (2x3)
pc
2 000
7.00
2,000.00
TOTAL

Php 300,949.55

Man Power Requirement

Position
Qualifications
Responsibilities
No. of Personnel
Status
Salary and Benefit
Farm Workers / Utility Men
Must be at least 18 years old
At least High School Graduate
Flexible to Working Schedule
Versatile in Production Operations
Meet requirements in time
Hardworking

Prepares the RWA, Spawn / Grain Production,
Acquires the raw materials in both rice straws and saw dusts.
Prepares the substrates, make the fruiting bags, steam the fruiting bags, store the fruiting bags,
Care – taker of mushroom houses, harvest the fresh oyster mushroom and pack the fruits.
12
Regular
5,000.00 per month


Plus:
13th month pay
SSS
PhilHealth
Pag-ibig

Production Officer / Driver
At least 25 years old.
At least 2 years in College level
Flexible to Working Schedule
Versatile in Production Operations
Has driver's License and has experience in driving

Performs the supervision in planting and producing of oyster mushroom
Ensures the quantity and quality control measures like the temperature and moisture of the mushroom houses
Delivers the harvested fruits to different target markets.

1
Regular
7500.00 per month


Plus:
13th month pay
SSS
PhilHealth
Pag-ibig

Technician
Has experience / expert in horticulture
Conducts inspections in making the spawn and in growing the oyster mushroom fruits in the mushroom houses
1
On call
On call's Fee of 2,000.00 per month


Personnel Budget
The operation personnel budget covers the salaries and wages, benefits of the personnel in the production. The production labor cost budget increases every 2 years as presented in financial assumption.
Table 20. Production Labor Cost Budget
Designation
No. of Employees
Rate per Month
No. of Months
Annual Salary
Production officers/Driver
1
7,500
13
97500
Farm Workers
12
5000
13
780,000
Technician (On call)
1
2000
12
24,000
Total
14
14,500
-
901,500

Waste and Waste Disposal Method
The proposed business shall ensure measures to be an eco-friendly business and will expose its waste in proper management of any trashes, residues from production and other used material on regular basis. The farm will follow guidelines, rules and regulations set by the Local Government Unit in the Municipality of Ubay in proper way of disposing wastes. They will abide any environmental acts and regulations to protect the nature. It will employ specific measures for each type of waste.
The management will implement paper less in handling the business transaction and operations. Thus, the helps of Electronic device / computer ton hold the records will be used. Since it is inevitable to use papers, the management will provide trash bins for segregation of any wastes into biodegradable, non-biodegradable and for hazardous waste in the farm. Furthermore, the management will also implement different waste disposal methods namely:
Composting – waste will be classified as biodegradable specifically the used oyster mushroom substrates after the harvest will be stored in a compost pit to make suitable, nutrient rich compost that can be used as plant manure and fertilizer for vegetable propagation, this can be done through vermi compost for fast decaying of organic matter. This biological reprocessing tremendously improves the fertility of the soil.
3R's (Reduce, Reuse, Recycle) – waste will be classified as non-biodegradable, specifically the use of PP bags will be used as vessels for vegetable propagation. The management will set a place within the project for site for a small vegetables plantation. Those used PVC and rubber bands will be reused if these usable and if not will be dispose in proper way.
It will be the responsibility of the utility men and farm workers to see if the farm's environment is clean and there is and observance in the proper disposal.

ESTABLISHMENT OF AN OYSTER MUSHROOM FARM IN UBAY, BOHOL: A FEASIBILITY STUDY

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