Vermicompost Production Business Plan 2x4e21

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

Vermicompost Production BUSINESS PLAN (Working draft)

For Legazpi City, Albay

Prepared by: Carlos O. Tulali [email protected] +639124126530

August 12, 2014

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

Contents

Page

Introduction

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Executive Summary

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4

Benefits to the Community

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5

Industry Analysis

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Manufacturing and Operations Plan ………………………………………….……………………..

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Labor Force

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Marketing Plan

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Financial Plan

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Financial Analysis

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APPENDIX 1. Vermicomposting Procedure ……………………...……….……………………….

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Background Summary of Financial Needs Estimated Investment Costs

Market Opportunity

Economic Development Community Development Human Development

Location and Space Requirements Inventory Control

Labor Requirements

Target Market

Market Opportunity Distribution Plans Pricing Estimated Investment Costs

Projected Sales and Income

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

INTRODUCTION Background The solid waste problem and its detrimental impact on the environment and people’s health have been the major concerns of local government units (LGUs) since the enactment of Republic Act 9003 (Ecological Solid Waste management Act of 2001. This vermicomposting project s the enactment of R.A. 9003 in which LGUs have the primary responsibility of implementing the law with proper segregation, collection, storage, treatment and processing (composting, recycling, reuse, recovery, etc.) in appropriate and environmentally-sound solid waste management facilities in accordance with ecologically sustainable development principles. RA 9003 also strategically envisions that all stakeholders, whether government institutions, private entities in commercial/industrial establishments, and every household must implement the solid waste management scheme. There are various methods of composting municipal and farm solid wastes or biomass applied in the Philippines. One such method that has become widely applied because of its simplicity, practicality and cost-effectiveness is vermicomposting, the process of composting with the use of earthworms. The increased adoption of vermicompost technology would lead to savings in farm inputs and an increase in environmental consciousness. Vermicomposting is a mesophilic process, utilizing microorganisms and earthworms, in which organic waste es through the earthworm gut, whereby the resulting earthworm castings (worm manure) are rich in microbial activity and plant growth regulators, and fortified with pest repellence attributes as well. Earthworms consume various organic wastes and reduce the volume by 40–60%. Vermicompost provides all nutrients in readily available form and also enhances uptake of nutrients by plants. Based on the increasing trend in the number of vermicompost technology adoptors, it was popularized among local entrepreneurs for the reason that it is considerably profitable and furthermore maximizes the flow of materials within the farm level. 1 2 The process of utilizing the organic wastes within the farms leads to a more sustainable farming practices. The nutrients are retained and returned back to the soil through vermicompost application. Such practice would make the soil suitable for crop production and increases crop yield since the soil quality is improved. 3 The vermicompost contains higher percentage (nearly twofold) of both macro and micronutrients than the garden compost. It has good sale potential over range of crops i.e. agricultural, 1

Aldridge, N. 2003. Black Gold: A guide to vermicomposting. Agriculture. Nov. pp. 24-25. Felix, R.C. 2005. Vermiculture - Sugarcane producer casts his luck with earthworm castings. The Philippine Star. May 1, 2005. 3 Aranda, E., Barois, I., Arellano, P., Irisson, S., Salazar, T., Rodriguez, J. and J.C. Patron. 1999. “Vermicomposting in the tropics.” In: Earthworm Management in Tropical Agroecosystems. P. Lavelle, L. Brussard & P. Hendrix, Eds., CABI Publishing, United Kingdom, pp. 253-287. 2

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

horticultural, ornamental, vegetables, etc. Agronomical studies show that earthworm-produced fertilizer is richer in plant nutrient than the soil, containing five times more nitrogen, seven times more phosphorus, 11 times more potassium, three times more exchangeable magnesium, and one and a half times more calcium. It contains a high percentage of humus, which helps soil particles form into clusters creating channels for the age of air and water. This kind of humus is found to be more effective compared to ordinary compost and chemical fertilizers and its use can lead to higher crop yield over a longer period of time. Revenues or earnings derived from the vermicomposting systems be it primary benefits or secondary will be valued and treated as benefits. Primary benefits are those outputs directly produced by the project while secondary benefits are those stemming from the direct outputs. The Benefits that can be derived from this project are the following: • selling of earthworms and vermicompost; • utilization of vermicompost as organic supplement and soil conditioner as substitute for inorganic • fertilizers; • production of organic crops; and • minimization of wastes through recycling into usable forms; • increase in employment and • greater economic activity in the farm level; • increased value of adjacent properties as a result of a cleaner environment; • decrease wastes movement to dump sites; • increase savings/revenues for the government; • good neighbor relations due to increase job availability; • consumption of safe organically produced crops; and, • pollution abatement.

EXECUTIVE SUMMARY Vermicomposting is defined as the production of compost with the use of worms. It is a fast way to convert farm waste and biodegradable municipal waste into organic fertilizer. It degrades waste as vermi or earthworm (African night crawler) feed on and digest waste materials. Vermicomposting results in a better quality product that is produced in only 4-6 weeks compared to ordinary compost that is produced in 8-12 weeks. Vermicomposting is a waste management technology utilizing earthworms to convert organic wastes into high quality castings and vermicomposts of high economic values. The proposed vermicompost production project involving the informal waste sector (IWS) is in effect, ing R.A. 9003 (Ecological Solid Waste Management Act of 2000) by working in partnership with the Legazpi City local government unit in promoting proper segregation, collection, storage, treatment and processing (composting, recycling, reuse, recovery, etc.) in appropriate and environmentallysound solid waste management facilities in accordance with ecologically sustainable development principles. 4

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

The proposed project also aims to provide alternative livelihood for of the proponent IWS association and at the same time, the National Organic Agriculture Program (NOAP) of the Department of Agriculture (DA) in its goal to promote, propagate, develop further and implement the practice of organic agriculture in the Philippines that will cumulatively condition and enrich the fertility of the soil, increase farm productivity, reduce pollution and destruction of the environment, prevent the depletion of natural resources, further protect the health of farmers, consumers, and the general public, and save on imported farm inputs. The total investment for a commercial scale vermicomposting facility is estimated at Php 1.803,000.00 to cover start-up capital and operating expenses of the commercial scale vermicomposting facility. Aside from the establishment of a commercial scale vermicomposting facility, of the IWS association may undertake backyard vermicompost production. The initial capitalization in starting a backyard vermicomposting business will depend on the scale (smallsmall-scale/backyard: Php 6,000.00, large-scale: Php 50,000.000). For every vermi bed with two kilograms (kg.) of African night crawler (ANC) worms, 90 kg. vermicompost will be produced per harvest. With 12 cycles a year, a total of 1,080 kg. of vermicompost will be produced. Assuming a farm gate selling price of P10 per kilo, a revenue of PhP10,800.00 is earned annually. ANC worms multiply in double quantity every six months with a corresponding doubling of the vermicompost business. One can opt to sell the worms at PhP500 a kilogram. Thus in 12 cycles, a total of 48 kg. of ANC worms can be harvested and sold for PhP24,000.00 or a toal annual revenue of PhP34,800.00 less annual production expenses of PhP6,120.00. This means a yearly net return of P28,680.00 from an investment of P6,120.00 or a 21 percent annual return on investment (ROI).

BENEFITS TO THE COMMUNITY Economic Development Aside from the establishment of the coop-managed vermicomposting facility, of the cooperative, especially the waste pickers and sorters from the informal waste sector (IWS), may undertake household vermicomposting. After six months, 10 kilos of worms can produce 300 kilos of vermicompost. Assuming a farm gate selling price of P10 per kilo, a monthly revenue of P3,000 is earned. Less monthly expenses of P1,500, monthly net income reaches P1,500. Worms double every six months with a corresponding doubling of the vermicompost business. This means a yearly net return of P28,680.00 from an investment of P6,000 per vermi bed per year or a 368.63 percent return on investment (ROI). One can opt to sell the worms at P500 a kilogram. A higher financial and social ROI can be achieved if vermicomposting is used for organic agriculture. Compared to inorganic fertilizers, vermicompost is less expensive, improves rather than destroys soil fertility, increases the value of farm produce and provides healthier food for the consumers. 5

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

In of economic viability, vermicomposting will be a good source of income aside from the various benefits which can be derived from its various products. Aside from the economic gains, savings will also be derived by using the product itself and its derivatives. Vermicompost has the added advantages of being more convenient, practical and economical than other similar composting systems. For one, it can be done at either the household or commercial level with minimal labor and capital requirements. The tools and implements needed for the operation are available locally and are sold by many commercial firms. Local agro-machinery shops can also fabricate the necessary equipment (e.g. mechanical shredder). It is in the marketing and utilization of vermi-based products that has the most impacts that encomes both socio-economic and environmental dimensions. Farmers can save on the use of chemical fertilizers and pesticides. They have the opportunity to improve the condition of the soil, increased yield of high quality crops resulting to more profit, help the environment by replenishing natural resources, plus helping many people by giving them jobs in vermi farms. In addition, excess vermicompost can be marketed commercially, while the surplus growth of earthworm biomass can also be sold to other farmers and households who wanted to start their own vermicomposting venture. Such practice would lead to economic development in the countryside and savings for the government through reduction in the use of imported fertilizers. Equitable distribution of income among the farmers would result to economic growth with equity. Community Development During the production stage, large volume of wastes is needed to produce large amount of vermicompost needed to fertilize large tracts of agricultural lands. These wastes can be derived from all possible sources: households, farms, communities, markets, and industries. In the vermicomposting process, wastes are not dumped or transported to dumpsites. Wastes are managed effectively by reducing waste transport and elimination of burning waste in the backyards or farmlands. Therefore, pollution and greenhouse gas emission are reduced that would result to improved environmental management and ecological integrity maintenance. Through the vermicompost production project, it is expected that the cooperative will be able to promote equal opportunities for its most vulnerable , the waste pickers and sorters, especially the women beneficiaries, to establish backyard vermicomposting and their household to benefit from project services. These benefits will include training and employment to be provided through the coop’s vermicomposting project. As agribusiness opportunities in production, processing, and marketing of the vermicompost increase, there is an incentive for the waste pickers and sorters and women in the community to participate and benefit from income-generating opportunities and employment through the project. Vermicompost or the castings of the earthworms is an excellent soil enhancer and bioactive fertilizer for organic farming. Earthworms can also be made into feed for fish or other domesticated animals. Vermicomposting can also help reduce the amount of biodegradable wastes in the San Jose Sico landfil. The production of vermicompost will also contribute to the promotion of organic farming and 6

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

in restoring the fertility of acidic soils resulting from organic matter depletion and overuse of chemical fertilizers in Batangas and nearby provinces. Through vermiconposting, adoptors can recycle their own resources and create an effective fertilizer in the process. The extra worms that are produced can be used as feed for poultry and fish, thus helping other local businesses. The advantages of this technology for the community include: 1. Recycling of organic wastes. 2. Production of energy rich resources. 3. Reduction of environmental pollution. 4. Provision of job opportunities for women and jobless of the coop and the IWS community. 5. Improvement of soil pH. (vermicompost acts as a buffering agent). 6. Improvement in the percolation property of clay soils (from the compost's granular nature). 7. Improvement of the water holding capacity in sandy soils. 8. Release of exchangeable and available forms of nutrients. 9. Increase of oxidizable carbon levels, improving the base exchange capacity of the soil. 10. Improvement of the nitrate and phosphate levels. 11. Encouragement of plant root system growth. 12. Improvement in the size and girth of plant stems. 13. Early and profuse plant flowering 14. Creation of a substitute protein in poultry and fish feed. After project financing, the sources of raw materials needed in producing vermicompost will be cheaper and always available in the project communities. With its low production cost, its selling price can be cheaper compared to inorganic fertilizer, making it more competitive in the market. As a result, farmers will be able to buy their farm’s needed fertilizer and increase their production volume. Human Development The stages of technology can be divided into three stages, namely, (1) vermicomposting knowledge dissemination through trainings, seminars and exposures; (2) production of different vermi-based products; and, (3) vermi-based products marketing and/or utilization. As early as knowledge dissemination, the target beneficiaries receive benefits which affect their way of thinking with regards to managing their wastes and soil fertility. The adoptors will be given options on ways to manage their wastes efficiently and they will not be forced to adopt the technology but through their own will. With the process, the target beneficiaries will be empowered through the provision of various opportunities to choose from. Even without technology adoption, target beneficiaries will gain much knowledge through the process of information technology transfer that they can use in one way or the other with regards to waste management and farming. Through informal education will equip the target beneficiaries with new knowledge and better opportunities in farming system and waste management. 7

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

Vermicomposting is safe and is not hazardous to the health of the farmers. In fact, the farmers' health is promoted because by using vermicompost, they avoid exposure to toxins and other harmful chemicals. The project shall promote beneficiary participation to trigger grassroots mobilization and social inclusion of the target beneficiaries from the informal waste sector (IWS) around specific themes like enterprise formation, organic farming, poverty alleviation, and women’s participation. INDUSTRY ANALYSIS Vermiculture or the science of breeding and raising earthworms was introduced in the Philippines in the late 1970’s 4 and gained popularity in the 1980’s 5. It started when Dr. Rafael D. Guerrero, the Executive Director of the Philippine Council for Marine Research and Development (PCAMRD) became interested with the technology because of the need for alternative high-protein feeds for fish. In the 1980’s, the dissemination of the technology was focused on boosting worm production basically for fishmeal, however, the cost of worms was still too high and becoming too expensive as feeds for the fishermen and hatchery owners because during that time the cost of commercial feeds was still comparatively low. The environment-friendly method of vermicomposting became popular again in recent years because it provided the opportunity for worm raisers to produce a good source of protein for feeds and at the same time convert farm and household wastes into organic fertilizers or vermicompost. Vermicompost or vermicast is an odorless, organic material containing adequate quantities of nitrogen, phosphorous and potassium (NPK) and several micronutrients, which are essential for plant growth. It became popular with organic farmers because it helps plants grow faster and more vigorous even without the application of commercial fertilizer. 6 Although, the vermiculture industry collapsed in 1984 due to the absence of an appropriate technology, 7 producers of organic fertilizers and commercial farms are now utilizing the technology to produce high quality bio-organic fertilizers and highly demanded organically-produced high value crops. Based on the guidelines issued by the Fertilizer and Pesticide Authority (FPA), organic fertilizer refers to any product of plant and or animal origin that has undergone decomposition through biological, chemical and or any other process as long as the original materials are no longer recognizable, free from plant or animal pathogens, soil like in texture. It contains not less than 20% organic matter (o.m) oven-dry basis and can supply nutrients to plants. All other materials that fall short of these requirements shall be classified as soil conditioners or amendments whichever is applicable. 4

Guerrero, Rafael III. 1979. The Potential of Earthworm Culture. Greenfields (August 1979). Tan, Narciso. 1985. Vermiculture in the Philippines. 6 http//www.jains.com 7 Tan, Narciso. 1985. Vermiculture in the Philippines. 5

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

According to the FPA, 6,271 metric tons of organic fertilizers were produced and 6,309 metric tons were sold in 2006 by 48 companies, most of them in Metro Manila. Actual production and sales vary from year to year and 1992 was a record breaking year with a production of 73,212 metric tons (MT) but sales for the year was only 17,138 MT. The record breaking sale was in 1995 at 28,090 MT tons with production figures of only 21,769 MT.

MANUFACTURING AND OPERATIONS PLAN Location and Space Requirements A 300 square-meter wide vermicomposting facility may be established at a lot that may be owned by the LGU, the IWS association or by its . Backyard vermicomposting may be undertaken by who want to become vermicompost producers and are qualified to apply for enterprise or productivity loan from their IWS association or the LGU. The loan shall be utilized by the IWS association member-borrower as working capital and for the construction of his/her backyard vermicompost production unit and purchase of needed raw materials, tools and equipment. Facilities Needed and Other Requirements Site Selection: Select a site that is shaded and well-drained with availablewater supply. Temperature requirement is 25C-29C undershade. Worms die when direct to sunlight. • Small Scale Production - Fixed capital needed would consist of hoes and spade, bolos and scythes and the worm bins. • Commercial Production - provision of working space for drying andbagging Materials: • •

Worms – African night crawlers Worm bins or worm beds - used worm bins/worm beds which are made of any material available whether iron bars with plastic lining, old plastic basins, bamboo slats or concrete hollow blocks. Precautions should be taken to ensure that they are protected from direct sunlight, too much water and natural predators.

Tools: • • • •

Gardening gloves Strainer/Sifter Spading fork Shovel 9

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

Raw Material/Packaging Material: • • • • •

Vermi (Worms) Foodwastes, fruit/vegetable trimmings and peelings, dry leaves and stems, animal manure Vermi Bed or earthworm bed (Dimension: 2x1x0.3m) Black plastic garbage bags Plastic sacks (50-kg. capacity)

Equipment: •

Mechanical shredder (optional)

LABOR FORCE Labor Requirements During the production stage, different products are derived from the vermicomposting system but the main products are vermicompost and compost worms that can further be transformed into other usable products such as animal feed and vermi tea. In the production process, vermicomposting will require much labor if mechanical shredder is not available. From segregation, chopping, bin preparation, maintenance until harvesting, vermicomposting requires at least one part time worker for a small scale vermicomposting system. Most of the cooperative are waste pickers or sorters who can also work at the coopmanaged vermicompost production site while their household can help in the production activities of their backyard vermicompost.

MARKETING PLAN Target Market The existing local market for vermicompost are mainly agricultural producers and farmers who slowly but increasingly use this as an alternative to chemical fertilizers because demand for organically produced food crops is also increasing. Organic fertilizer has likewise increased in use as result of steep increases in the price of commercial fertilizer. These developments work in favor of vermicomposting. Aside from the fact that no imported inputs are required in vermicomposting, producing their own fertilizer makes the farmers less vulnerable to changes and fluctuations in the prices of other commodities particularly chemical farm inputs. There is practically no risk at all in producing vermicompost whether for one's use or surplus production. The following are the other potential markets for vermicompost: 10

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

• • •

Direct sale to end s. This includes farmers’ groups and subdivisions in nearby cities and municipalities; Bulk sale to producers and distributors of organic fertilizer that needs vermicast as one of its primary components; and High-end market in urban areas due to the popularity of organically grown farm produce among the rich residing in posh villages and other high-end residential areas.

According to the Fertilizer and Pesticide Authority (FPA), 6,271 metric tons of organic fertilizers were produced and 6,309 metric tons were sold in 2006 by 48 companies. Actual production and sales vary from year to year and 1992 was a record breaking year with a production of 73,212 metric tons (MT) but sales for the year was only 17,138 MT. The record breaking sale was in 1995 at 28,090 MT tons with production figures of only 21,769 MT. Market Opportunity

Vermicomposting technology has been in the country since 1978. However, only few people adopted it and some ceased their operation. Its low adoption until now is due to the lack of market linkages and high cost of earthworms. But once the market have been identified, then its potential would be tremendous since the vermi products command high prices in the market. Vermicompost can be sold from Php 10.00 to 25.00 per kilogram while earthworms are from Php 500.00 to Php 1,500.00 per kilogram. Some sellers repackage their products with starter kits and reading materials but with higher price. Some vermicomposting adoptors, aside from producing and selling their products, are also engaged in conducting training and producing other products (i.e. vermitea, vermimeal) derived from the main vermi products. With such activities, they received more benefits than selling vermicomposts and compost worms. Even during the promotion of the technology, these people get paid for just sharing their experiences and practices in vermicomposting. The existing local market for vermicompost are mainly agricultural producers and farmers who slowly but increasingly use this as an alternative to chemical fertilizers because demand for organically produced food crops is also increasing. Organic fertilizer has likewise increased in use as result of steep increases in the price of commercial fertilizer. These developments work in favor of vermicomposting. Aside from the fact that no imported inputs are required in vermicomposting, producing their own fertilizer makes the farmers less vulnerable to changes and fluctuations in the prices of other commodities particularly chemical farm inputs. There is practically no risk at all in producing vermicompost whether for one's use or surplus production. The following are the other potential markets for vermicompost: • Direct sale to end s. This includes farmers’ groups and subdivisions in nearby cities and municipalities; • Bulk sale to producers and distributors of organic fertilizer that needs vermicast as one of its primary components; and • High-end market in urban areas due to the popularity of organically grown farm produce among the rich residing in posh villages and other high-end residential areas.

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

Distribution Plans The vermicompost can be directly sold to farmers groups or cooperatives who are engaged in organic farming, industrial plants and real estate developers (subdivisions and condominiums) with landscaping and organic food production activities, and the Department of Agriculture. Pricing Vermicompost can be sold from Php 10.00 to 25.00 per kilogram while earthworms are from Php 500.00 to Php 1,000.00 per kilogram. Some sellers repackage their products with starter kits and reading materials but with higher price. Some vermicomposting adoptors, aside from producing and selling their products, are also engaged in conducting training and producing other products (i.e. vermitea, vermimeal) derived from the main vermi products. With such activities, they received more benefits than selling vermicomposts and compost worms. Even during the promotion of the technology, these people get paid for just sharing their experiences and practices in vermicomposting. Advertising and Promotion Efforts The cooperative will actively participate in organic agriculture promotion activities carried out by organic food products and organic farming enthusiasts, in partnership with the DA’s organic agriculture programs at the city/municipal, provincial and national levels.

FINANCIAL PLAN Estimated Investment Costs The total investment for a commercial scale vermicomposting facility is estimated at Php 1.803,000.00 to cover start-up capital and operating expenses of the commercial scale vermicomposting facility. (Table 1).

Table 1. Budgetary Requirements and Sources of Funds for the Proposed Vermicomposting Project Component/Activity EXTENSION SERVICES AND TRAINING Salaries and travel expenses of 1 extension worker @ 5,000.00/month x 36 months Training and workshops @ P100/day x 200 pax x 3 days Subtotal A HOUSEHOLD LEVEL VERMICOMPOSTING

Total Php180,000.00 Php60,000.00 Php240,000.00

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

Component/Activity Material and biological inputs: Hollow blocks and nets for 200 units worm beds @ Php250/unit 10 kg. worms @ Php500/kg x 200 Direct Costs: Labor @ Php300 x 2 laborers x 100 days 400 units shovel @ Php 300/unit Subtotal B VERMICOMPOST PRODUCTION FACILITY Equipment: 1 units mechanical shredder @ Php 150,000/unit 3 units weighing scale for 500 kg. @ Php 10,000.00/unit 3 units weighing scale for 40 kg. @ Php 5,000/unit 3 units bag closer @ Php 6,000/unit Subtotal C Land and Building: 300 sq. m. open shed warehouse @ Php20,000.00/sq. m. Land (Php20,000/year x 3 years

Total Php50,000.00 Php1,000,000.00 Php60,000.00 Php120,000.00 Php1,230,000.00

Php150,000.00 Php30,000.00 Php15,000.00 Php18,000.00 Php213,000.00

Subtotal D GRAND TOTAL

Php60,000.00 Php60,000.00 Php120,000.00 Php1,803,000.00

Typically 5,000-7,500 metric tons (MT) mix of animal manure and organic waste is required to produce 3,000 MT vermicompost. Animal manures, biogas sludge, baggase, municipal solid waste and range of agricultural residues serve as good raw materials for vermicomposting. Aside from the establishment of the organization-managed vermicomposting facility, of the coop may undertake backyard vermicomposting. The initial capitalization in starting a backyard vermicomposting business will depend on the scale (small-small-scale/backyard: Php 6,000.00, largescale: Php 50,000.000).

FINANCIAL ANALYSIS Projected Sales and Income Aside from the establishment of the commercial scale vermicomposting facility, of the IWS association may undertake backyard vermicompost production. For every vermi bed with two kilograms (kg.) of African night crawler (ANC) worms, 90 kg. vermicompost will be produced every harvest. With 12 cycles a year, a total of 1,080 kg. of vermicompost will be produced. Assuming a farm gate selling price of P10 per kilo, a revenue of PhP10,800.00 is earned annually. ANC worms multiply in double quantity every six months with a corresponding doubling of the vermicompost business. One can opt to sell the worms at PhP500 a kilogram. Thus in 12 cycles, a total of 48 kg. of ANC worms can be harvested and sold for PhP24,000.00 or a toal annual revenue of

13

Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

PhP34,800.00 less annual production expenses of PhP6,120.00. This means a yearly net return of P28,680.00 from an investment of P6,120.00 or a 21 percent annual return on investment (ROI). Table 2. Projected Production Cost, Revenue and Income per Vermi Bed per Year through for Backyard Vermicomposting Particulars Amount in Php

A. Annual Revenue (1 Vermi bed) 90 kg. vermicompost x 12 cycles = 1,080 kg. of vermicompost @ P10 00/kg. Additional Revenue from selling worms from 1 vermi bed: 4 kg. of vermi x 12 cycles = 48 kg. of vermi @ P500.00/kg.

TOTAL REVENUE

B. Annual Production Cost African Night Crawler Worms 2 kg. @ Php 500.00/kg. Labor (12 cycles @ Php 250.00/cycle) Sack (2 sacks x 12 cycles @ Php 4.00/pc.) Shovel Spading fork Strainer/sifter Gardening gloves Black plastic bags Fixed Investment: Vermi Bed (2x1x0 3 m.) ESTIMATED TOTAL PRODUCTION COST Revenue Less: Production Cost ESTIMATED NET INCOME

Assumptions: - 1 vermi bed = 12 harvests in a year. - Vermi bed (Dimension: 2x1x0.3 m.) - African Night Crawlers is sold at P500/kl. - Harvesting is done every after 30 days. - 150 kilos of biodegradable wastes + 2 kilos of worms = 90 kilos of vermicompost - Compost sells at P10.00/kl. - 2 kg. of vermi per bed would yield 4 kg. of additional vermi

10,800.00 24,000.00 34,800.00 1,000.00 3,000.00 120.00 500.00 500.00 200.00 200.00 100.00

400.00 6,020.00

34,800.00

6,120.00 28,680.00

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Japan Social Development Fund

The World Bank

JSDF Grant Social Inclusion and Alternative Livelihoods for the Informal Waste Sector Project (JSDF Grant No. TF012037) No. 7-A South J Street, Quezon City http:/www.swapp.org.ph

APPENDIX 1. Vermicomposting Procedure 1. Collect biodegradable materials such as food wastes, fruit/vegetable trimmings, peelings, and dry leaves and stems. 2. Shred/grind the food wastes, fruit/vegetable trimmings, peelings, and dry leaves and stems. 3. Mix old animal manure and chicken droppings (2 months old) with shredded vegetable waste. This will improve the nutrient content of the finish product. Do not use fresh manure for the ammonia produced will give discomfort to the worms. 4. Sun-dry these materials for at least three days and let them undergo partial fermentation. 5. Weigh the shredded grinded materials before putting in the compost bed to determine ratio of compostables and worms. 6. Before stocking the earthworms, make sure that all materials in the vermi bed are prepared. 7. Moisten the bedding with water and cover it with black plastic garbage bag, old sacks, net, or banana leaves to start "anaerobic process", which is completed after 1-2 weeks. 8. After the anaerobic process, remove the cover and stock the vermi bed with earthworms. 9. Maintain the vermi beds' moisture content and temperature through regular checking. Protect the worms from predatory animals. 10. Vermicompost is harvested when most of the materials have been consumed by the worms. This takes about 30-45 days depending on environmental and culture conditions. 11. In harvesting, separate the "vermi" from the vermicompost either manually (handpicking) or using a strainer/sifter. 12. Properly pack vermicompost in sacks and store in a cool dry place. 13. Harvested/sifted vermi from the vermi beds may either be used for the next vermicomposting cycle or for expansion by constructing additional vermi beds. 14. The offspring or produce of the initial vermi in the vermi bed can also be sold to would-be vermicompost producer or to fish pond owner as fish meal.

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