VERMICULTURE AND VERMICAST PRODUCTION

RATIONALE

Organic farming is practiced by farmers  nowadays because it is considered as healthiest way of    growing food crops. It is an emerging farming   system that most of the farmers observed not only in the Philippines but even overseas.     Organically grown food crops are increasing in market demand. Organic fertilizer has likewise increased in use as imported commercial fertilizer have been increasing its prices. Vermi-casting of humus is one of the organic fertilizers that revives the soil fertility level and brings back life to soil environment, improves soil texture and enriches water holding capacity. Humus has shown its potency in   inducing higher crop yield for a longer period.

For organic farming, castings of earthworms also known as vermicomposting is an excellent soil enhancer and bioactive high quality fertilizer. This is a good alternative in using chemical fertilizers and this has been proven in field tests. Vermicomposting is environment-friendly since earthworms feed on anything that is biodegradable and it aids the disposal problem. No imported inputs required given that worms are now locally available and the materials for feeding are abundant in the locality. Like market wastes, grasses, used papers and farm wastes.

Vermiculture and vermicast production industry have potentials in the domestic market especially in Region12 since it is an agro-based industry area. It now becomes a major component of agri-business models across the country. It can be easily produced and maintained by any investor who wishes to engage in this kind of industry. This    venture is highly profitable since both the worms and castings are saleable.

OBJECTIVE

This project aims to provide sufficient organic fertilizer (vermin-based) as well as to promote organic fertilizer application to local farmers.

PROJECT DESCRIPTION

Vermicuture is a process of propagating earthworms for fast production and sold to customers who use them for the same or other purposes. Vermicasting otherwise known as vermicomposting is the process by which worms are used to convert organic materials (usually wastes) into a humus-like material. African Night Crawlers (ANCs) are the agents used in creating vermicast. It falls under the classification of compost worms which live on the upper surface of the earth and they eat compost, not the soil. Earthworm mass is basically a by-product of vermicomposting.

The population of ANC multiplies, 2 times per cycle. These are sold Php 500.00 per kilo after every vermicast harvest which is when they have already multiplied. Vermicast are sold Php 200.00 per 40 kilo bag. Based on the projected sales, the project will generate Php 3,000.00 on the first cycle and approximately     doubled on the following cycles. Vermin culture and vermin composting are rapidly gaining recognition and use in agricultural   production today, so, it will be easier to promote.

General Santos City, South and North Cotabato were among the areas in the region that were found to be the preferred location of the project due to the presence of growers of fruits and vegetables who are  said to be primary markets of the product. However, Vermi-composting technology is simple and inexpensive because it is entirely    organic. Initially, ten (10) worm bins will be used in the project with two (2) kilograms of African Night Crawlers (ANC) per worm bin. Preparation of raw materials starts by cutting the materials for use as substrate (rice straw) into smaller pieces by chopping with a bolo or cutting with a scissor. Mixed raw materials (rice straw + manure) are put in the decomposition chamber.  Materials are then moistened and composting bin is  covered to initiate anaerobic decomposition. It takes 10 to 15 days to complete anaerobic decomposition and only then that they are ready for worm consumption. After the anaerobic decomposition, earthworms are introduced into the substrate. Aerobic decomposition lasts for 40-60 days depending on the materials used and the ratio of the worms to the substrate. Within the period, moisten (not soggy) the substrate regularly to provide the right moisture (60-80%) for the earthworm to grow and multiply. Harvesting will commence 45 days after stocking of worms. Prior to harvest, watering the substrate for 1 week is refrained to ease the separation of castings from worms and likewise preventing the castings to become compact. Then the breeder worms are  segregated from juvenile/baby worms by placing them in different containers or bins.

The total project cost of the vermiculture and vermicasting project is Php 15,595.00 in which Php 1,195.00 is the working capital for the first cropping cycle and expected to increase on the succeeding cycle since the production increases. The net income before tax on the first two cycles is Php 2,040.00 and Php 4,375.00 respectively. Income is doubled after first cycle since production is also doubled due to the multiplication of the worm. Financial ratios show that Gross Profit Rate (GPR) and Net Profit Rate (NPR) are 77% and 68% respectively. The return on investment is 105%. The cost of investment will be recovered approximately after 10 months and 9 days of operation.  This means that the project is worthwhile to embark on. On the other hand, if the project is        managed well, it could easily double its return.

MARKET TRENDS AND OPPORTUNITIES

Due to several crises arising like expensive cost of commercial fertilizer, poor soil fertility, and low income, farmers seek a more cost efficient type of fertilizer which is  the organic fertilizer.

Presently, farmers in Region 12 have reduced their area of production due to the high cost of inorganic fertilizer in the market. Without the needed fertilizer requirement, their land would never give a good yield which will in turn, cause the reduction of the  farmer’s production volume.

The sources of raw materials needed in producing the organic fertilizer are cheaper and always available in the area. With its low production cost, its selling price can be cheaper compared to non-organic ones, 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.

FACILITIES NEEDED AND OTHER REQUIREMENTS

A.   Site Selection - select a site that is shaded and well-drained with available

water  supply. Temperature requirement is 25C-29C under

shade. Worms die when direct  to sunlight.

1. Small Scale Production - Fixed capital needed would consist of Hoes and

Spade,  bolos and scythes and the worm bins.

2. Commercial Production - provision of working space for drying and

bagging

B.  Materials

1. Worms – African night crawlers

2.  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 hollow blocks. Precautions are

taken to ensure that they are protected from direct sunlight, too much

water  and natural predators.

FINANCIAL REQUIREMENT

VERMICULTURE AND VERMICAST PRODUCTION
Total Project Cost
Particulars	Amount
Fixed Assets
10 Hoes and Spades	400.00
10 Bolo and Scythe	2,500.00
10 Worm Bins	1,500.00
Biological Asset
African Night Crawlers (20 kilos @ Php 500.00/kilo)	10,000.00
Total	14,400.00
WORKING CAPITAL (1st Cropping Cycle = 45 days)
Production Inputs	510.00
Direct Labor	200.00
Overhead Expense	210.00
Operating Expenses	275.00
Total	1,195.00
Total Project Cost	15,595.00
Note: TPC excludes the land and production area cost Underlying Assumptions: v  Initially, two kilos of African Night Crawler will be put in each worm bin. v  The number of African Night Crawler is doubled every cycle. v  One (1) kilo of African Night Crawler contains 1,000 pieces. v  10% of the multiplied African Night Crawler (ANC) are sold every after vermicast harvest. v  No. of Cycles in a year is 8 cycle. v  Substrate requirement is 10kilos/worm bin on first cycle. v  Additional 10 kilos on substrate requirement on the succeeding cycle. v  Substrate Proportion Requirement (70% rice straw: 30% manure). v  Vermicast Recovery Rate is75%. VERMICULTURE AND VERMICAST PRODUCTION Projected Sales & Income Particulars 1st Cropping Cycle 2nd Cropping Cycle Sales Vermicast (5 bags @ Php 200.00 per 40 kilo bag) 1,000.00 (10 bags @ Php 200.00 per 40 kilo bag) 2,000.00 African Night Crawlers (4 kilos @ Php 500.00 per kilo) 2,000.00 (7.2 kilos @ Php 500.00 per kilo) 3,600.00 Total 3,000.00 5,600.00 Less: Cost of Sales Production Inputs Rice Straw ( 7 kilos/ wormbin @ Php3.00) 210.00 420.00 Cow Manure (3 kilos/ wormbin @ Php10.00/kilo) 300.00 600.00 Direct Labor (2 workers @ Php20/harvested bag) 200.00 400.00 Overhead Expense Water (Php100.00/cycle) 100.00 100.00 Depreciation (Fixed Asset/EUL*/Working Capital Cycle) 110.00 110.00 Amortization (Biological Asset/EUL*/Working Capital Cycle) 125.00 125.00 Miscellaneous Expense 150.00 150.00 Total 685.00 885.00 Gross Income 2,315.00 4,715.00 Less:  Operating Expenses Pre-Operating Expense (Pest Control) 100.00 100.00 Bags (Php10.00/pc) 50.00 90.00 Delivery Cost (Php5.00/bag) 25.00 50.00 Repair & Maintenance 100.00 100.00 Total 275.00 340.00 Net Income Before Tax 2,040.00 4,375.00 Return on Investment (Ave. Net Income/TPC) 105% 224% Payback Period (TPC/Ave. Net Income + Amort. + Dep'n) 10 Months and 9 Days Gross Profit Ratio (Gross Profit/Total Sales) 77% 84% Net Profit Ratio (Net Profit/Total Sales) 68% 78% *EUL – Estimated Useful Life For Inquiries, please contact: National Economic Research and Business Assistance Center SOCCSKSARGEN (Region 12) Ground Floor, RA Bldg., South Osmena St., General Santos City Telefax No. 083-5528250 & Email Address: nerbac@dti12.org. Visit: www.investinr12.net