New Agriculture Alternative and Development...New Agriculture Alternative and Development Khoum Napoung, Ban Phouvieng, Phoukout District, Xiengkhouang Province, Laos Community Base

New Agriculture Alternative and DevelopmentKhoum Napoung, Ban Phouvieng, Phoukout District, Xiengkhouang Province, Laos

Community Base Primary Production and Rural Economic DevelopmentProject Proposal

Proposed by: Daophachanh PhetsayaratSponsored by: Agriculture and Forestry Division of Phoukout District, Xiengkhouang Province

House No. 37, Unit 2, Ban Paen, Phoukout District, Xiengkhouang Province, LaosTel: +856 20 55396175

E-Mail: [email protected]

ຄ Nສ Aພ P

Policy & Business Plan

Introduction

This project is named New Agriculture Alternative and Development. Though it is regardedas agriculture but concentrates on mushroom farming instead of rice, vegetables or any conventionalproduces or livestock. This document is organized as guideline for the entire project and might taketime to complete all activities proposed. We will begin with small budget and let it grow on time.

However, even though it is designed for demonstration, training and as commercial practice,its direct beneficiaries are farmers from rural communities especially minority tribes, women anddisadvantage groups. Those qualified, selected and enrolled for training course organized by projectmanagement will become both trainees and farm workers of the project for two months.

The training will concentrate on hand on practice to guarantee sound experience, confidenceand readiness for establishment of commercial mushroom farming when the trainees graduate andreturn home. The project management allocates budget for all trainees and the training. The traineeswill be well fed, accommodated and looked after.

The project site will also be used as training field because it will be developed as farmcomplex and project central management. The project proposed site locates at Khoum Napoung, BanPhouvieng, Phoukout District, Xiengkhouang Province, Laos. There are 10 buildings on the site. Theywere constructed decades ago but have been little used. As the result, they are very much rundown.Nevertheless, 6 of them are in good condition and usable for mushroom farming with little repair.

We choose mushroom farming practice as principal activity because of following reasons:1. Mushroom farming does not need a lot of land for producing of large quantity of produce

because, unlike conventional agriculture such as rice and vegetables that scatters on earth surface, itstacks up on top of one another. Furthermore, it does not rely on soil quality and weather but can begrown in any climate and all type of land.

2. Mushroom farmers do not need to work under heat of sunshine or wet-cold of rain butcomfortably in house. Therefore, in comparison to other type agriculture, it is very easy and simple.

3. Mushroom farming has less competitors and mushroom (for cooking) can be sold as highprice as 20,000.00 – 30,000.00 kip ($2.50 – $3.50)/kg. The price is much higher for mushroom usedin medicines (it currently could be sold 300,000.00 kip/kg). For special mushroom or known locallyas HETVAI, its price could be as high as 1,000,000.00 kip per kilogram.

4. Market for mushroom is huge and demand for mushroom is no limit because, apart fromlocal market, we also have markets in Vientiane, Savannakhet and Pakse. Nonetheless, the largestones are in Vietnam and China.

5. Materials and ingredients for mushroom farming are easy to find, cheap and generallyavailable. In many cases we can obtain the material and ingredients for free.

6. Mushroom farming produces quick result, low cost and cheap investment but high return.7. Mushroom farming causes no harm to environment but indirectly improves biodiversity

and ecosystem because it demands no land clearing, produces no pollution and has no waste.However, apart from mushroom farming, we will also practice some conventional agriculture

and livestock farming as complementary activities. Yields from the practices will be principally forself-consumption, study and replication.

After graduation, the trainees will be organized into a production network established by theproject management in which the project management would act as central administration andbusiness agent of the network. Therefore, produces of the network will be all sold either to the projectmanagement or with the project management or through the project management. The projectmanagement will establish a safety nest to all participants from net profit earned from trade.

We will principally implement the project with funding from grant and self-contribution.Project Originator and Director

Daophachanh PhetsayaratDate: 25 November 2015.

Recommendation Picture

Mushrooms below are what we have successfully grown and sold. They will be primary offered fortraining in the project. Those subjected to Research and Development are not included in the picture

Index

Topic Page

Project outline ........................................................................................................................ 1

Project background ................................................................................................................ 1

Strength and weakness of mushroom farming ....................................................................... 3

Beneficiary ………................................................................................................................... 4

Objective .................................................................................................. .............................. 4

Strategy ......................................................................................................... ......................... 5

Implementation ....................................................................................................................... 6

Environment ........................................................................................................................... 7

Roof hole and opportunity ...................................................................................................... 8

Risk and risk management ..................................................................................................... 8

Success, sustainability and growth ........................................................................................ 9

Future of the project after grant finishes .............................................................................. 10

Women and minority tribe benefits ....................................................................................... 10

Target and indicator ............................................................................................................. 12

Organizational structure ....................................................................................................... 13

Agriculture and livestock ...................................................................................................... 14

Funding and source of fund ................................................................................................. 14

Other comment .................................................................................................................... 14

Application for government concession and exemption ....................................................... 15

Conclusion ........................................................................................................................... 16

Feasibility study

Supplementary documents

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Lao People Democratic RepublicPeace Independence Democracy Equality Prosperity

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Project Proposal

I. Project synopsis:Project name: New Agriculture Alternative and Development.Project type: Agriculture.Purpose: For demonstration, training, hand on practice, motivation and result drive.Goal: To establish a training center for modernization of farmers and rural community

especially minority tribes, women and disadvantage groups. Principal tasks include coaching, trainingand enabling farmers for new approach in agriculture practice that demands low cost, less investmentand easy to run but high return and no harm to environment. Most importantly, the project goal is tocreate leadership in new agriculture alternative and rural economy.

Activities: Mushroom farming, spore extraction, R & D, training, marketing and sale.Target: The project will break even and makes profit from the end of 18.00 month operation.Location: A former wartime estate (now very much run down), Khoum Napoung, Ban

Phouvieng, Phoukout District, Xiengkhouang Province, Laos.Originator: Daophachanh Phetsayarat.Founder: Daophachanh Phetsayarat.Trainer: Organized from Polytechnic Academy of Xiengkhouang Province (Ban Lee).Implementing partner (for 2.00 years):

(1) The Polytechnic Academy of Xiengkhouang Province.(2) Agriculture and Forestry Division of Phoukout District.

Accountant and auditor: Independent and fully certified with high reputation.Project coordinator and consultant:

(1) Lord Mayor of Phoukout District.(2) Agriculture and Forestry Division of Phoukout District.

Number of personnel: 24 (excluding project coordinators and consultants).Anticipated number of trainees/project participators throughout grant implementation period

of 1.00 year: 150.00 or 25.00 people/term.Owner of the project: The founders and those sign ownership agreement with the project

management after completing a training course at the center.Head of the project and director: The originator – Daophachanh Phetsayarat.Grant/loan applicant: The originator and implementing partners.Target group: Farmer and minority tribes.Beneficiary: Working age group especially those participate in the project.Priority and special treatment: Disadvantage groups, women and minority tribes.Timeframe for implementation of the grant: 12.00 months (from June 2016 – June 2017).Fund needed for implementation: $650,000.00Donor/funder: Various (It might not be single funder).

II. Project background:1. Sources of the project:Laos is one of the least develop countries in the world. However, because of geographic

condition and less arable land, more poverty is borne in the north than in the south and low land areaalong the Mekong River. Some, especially hill tribe minorities, even struggle throughout the year forfood because their slash and burn practices yield less crops and the crops are all consumed within afew months after harvest. In general, in the north; food security, environment, social benefit, heal careand development become principal issues. In this document, we call the issues as PROBLEMS.

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Indeed, the problems do not end as defined but also imprecate with trade and employmentbecause, in the north, there are less commercial activities and business practices. Subsequently, youngpeople leave home looking for opportunities and better life elsewhere.

Xiengkhouang province is one in the north and bears exact problems as other northernneighboring provinces do. The problems could be regarded as chronic diseases that could hardly behealed because they have germinated and rooted from poverty.

In fact, it is easy to understand what the problems are but it is next to impossible to get rid ofthem in current economic situation because they are generated from poverty. That means to eliminatethe problems we need to eliminate poverty first.

Nevertheless, as elders in community, we see the problems from beginning and have strivenhard to tackle them from early state. Unfortunately, we produce little or no success. That is a failurebut we do not give up because we fully understand that the problems could be solved and things willget better if we can offer better alternatives to the communities.

We spend a considerable time to create and find the best possible alternatives to encounterand solve the problems. Finally, we decided to choose MUSHROOM FARMING as the alternative.

To be short, this project is generated from poverty and anxiety. It is engineered and compiledby elders in the community who experience and understand the problems from beginning.

2. Reasons to choose mushroom farming:We choose mushroom farming as principal catalyst to deal with the problems because of 11

reasons below:1) Unlike other types of agriculture, mushroom can be grown for large quantity in small land

area. Furthermore, iIt can be grown in all climate type and bears little or no concern about soil quality.Most significantly, it needs less water. That means mushroom farmers have less workload but earnmore. Such qualifications are highly suitable to our need in solving the problems we have experiencedbecause Xiengkhouang province especially Phoukout district has less arable land and relatively dry.

2) Unlike other types of agriculture, mushroom farming is practiced in house. Therefore,mushroom farmers, unlike conventional farmers, do not work under heath sunshine or in the rain.That means mushroom farmers can work 24.00 hours/day all year round and earn all year round.

3) Mushroom farming, in comparison to other types of agriculture, produces quick resultbecause it can be harvested within a month after spore is planted.

4) Mushroom is relatively in high demand and could be sold around $2.50/kg.5) In comparison to other types of agriculture practice, mushroom farming needs low

investment but achieve high return.6) Materials for mushroom growing are easy to find and cheap or even getting for free.7) Mushroom farming is easy to manage and everybody can do including disable people and

elderly because the farm area does not need to be as large as those for conventional agriculture.8) Mushroom farming produces no harm to environment and completely legal.9) Meat, chicken and fish can be replaced by mushroom because it comprises with high

protein, vitamins and mineral but little or no fat.10) In comparison to other types of agriculture, mushroom farming is relatively easier to be

evolved to industrial level because it has plenty of room for growth and improvement. Indeed, manykinds of mushroom in Xiengkhouang Province have not yet been analyzed and extracted for sporeeven though they have been gathered for food and highly popular for very long time. Some can besold as high price as $200.00/kilogram (this mushroom is known as HETVAI in local language).

This project will conduct a research of HETVAI in full detail and extract its spore for farmingwith the budget allocated. The research and extraction will be conducted in a hurry because we areafraid that the mushroom – HETVAI will stop shooting and extinct due to climate change,overharvesting and deforestation.

11) Mushroom farming bears low risk because climate/weather and soil/land condition havelittle or no direct effect on the practice.

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3. Action and decision:Because of the above mentioned, we contacted institutions that offer agriculture training

course especially mushroom farming for enrolment. However, our local/provincial institution did notoffer the short course we were looking for at the time. As the result, we went south to ChampasakProvince to take the course at the Provincial Agriculture Training College in Pakse after receivingconfirmation from the school. The training concentrates on hand on practice and took only 3.00weeks. It carried out with conventional students who enrolled for associate diploma.

It works beyond our expectation. After the training ended, we could grow mushrooms in largequantity – most ended up in Pakse market. We keep farming the mushroom until today.

The success drew a lot of attention and many visited us with praise. Some want to work for uswithout pay because they need experience for their own practice. These people do not have money forenrolment; on the other hand, they are not qualified for formal training course because they do nothave any school certificate.

After working with mushroom for 3.00 years, we have enough knowledge and experiences toteach others especially farmers, women and disadvantage groups. However, to help others we need acomprehensive training center and strong financial support at beginning. Therefore, we compile thisproposal for formal approval from relevant government authorities. The document will then besubmitted for funding from various funders (including bank/government) and development agencies.

In fact, this project is organized on behalf of rural community and disadvantage groups. It isdesigned for eliminating poverty and dealing with the problems mentioned earlier. We believe that, ifit is implemented, the project will bring good life and better future to its beneficiaries and participants.

III. Strength and weakness of mushroom farming:This project is organized with clear objective and understanding – to solve the problems we

have experienced. Therefore, difficulties and problems as well as convenience and encouragementcould well become a norm in implementation and real practice. More detail described below:

1. Weakness and improvement:1) In comparison to conventional agriculture, livestock farming and aquaculture; mushroom

farming is relative new and not widely practiced. The new comer often bears disadvantage because itis not well known and less reputation. Therefore, it is next to impossible for consumers to replacemeat, fish, chicken and vegetables with mushroom.

To solve the problem, we will conduct marketing campaign aggressively and provide publicwith healthy consumption information so that consumers would realize that mushroom compriseswith high amino acid, protein, vitamin and medicines but low or no fat.

2) Though mushroom farming has been practiced for many years and mushroom has beenconsumed in large quantity every day, scientific research has not yet been conducted efficiently.Those have been analyzed, results have not been widely published and available. Subsequently,consumers see mushroom less important in comparison to meat, fish, chicken and vegetables.

To solve the problems, we will allocate budget for scientific research into all mushrooms wegrow and make the study results public from early stage. The research papers will be utilized as toolsfor our marketing campaign and consuming references. They will also become medical, scientific andconsuming quotes about mushrooms. They will be reliable and acceptable because they will made bythe Ministry of Health. They will be translated into many languages including English and Chinese.

When consumers realize qualification of the mushroom such as high amino acid, high protein,rich in vitamins and rich in medicines but low fat, sale volume will rise significantly and mushroomfarming will be propelled automatically to industrial level to meet the demand.

3) Local market is not large enough to handle mushroom farming in large production. Theproblem will wear down our production force and pulls back economic opportunity. The problemneeds to be addressed and tackle in a hurry effectively. Otherwise, our beneficiary especially farmersand disadvantage groups will lose big business, employment and economic opportunities.

To overcome the problem, we will bring produces to sell in different markets including

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Vientiane, Vietnam, Savannakhet, Pakse etc. When we have many markets, sale problem will reducesignificantly, production will rise and income of community/target groups increase. Most importantly,the problems identified early will either disappear or diminish to the lowest possible level.

2. Strength and convenience:1) We have knowledge, experience and confidence in mushroom farming. At the same time,

we get full support and encouragement from the Provincial Polytechnic Academy (the courses onoffer include agriculture and mushroom farming) and relevant government authorities/agencies.

2) Mushroom farming has little or no competitor in Xiengkhouang Province.3) Materials for mushroom farming are easy to find, widely available and cheap.4) Project location is accessible all year round and not far from Phonsavane – the capital city

of Xiengkhouang Province. From here, the produces can be transported to Vientiane, Vietnam,Savannakhet and Pakse on tarred road. The entire project area is about 5.00 hectares and no need forclearing. On the other hand, it is on the bank of a large river known as Nam Ngeum. This allows us toaccess to clean water for both irrigation and consumption. On the other hand, electricity is alreadyavailable and can be reconnected with relatively low cost.

5) Buildings from growing mushroom are already available – at least in part. The structureshave been on the site for over 3.00 decades and very much run down. However, they can be renovatedand used for mushroom farming or any purpose of the project. The renovation is definitely cheaperthan brand new construction. Both the land and buildings are obtained from government concessionfor 30.00 years period but can be extended twice. That means total concession period is 90.00 years.We plan to use the entire properties for benefit of community especially rural farmers, minority tribes,women and individuals regarded as disadvantage people by redeveloping the properties for mushroomfarming and training center. We will seek grants or loans from development funds worldwide forredevelopment and spending cost during first year operation.

6) Though the local market is not big enough for large scale mushroom production, we havealternative and solution. Of course, local market is priority. However, our eyes are focusing on thecapital city market – Vientiane, Savannakhet, Pakse and Vietnam. We can truck the produces to everymentioned market relatively easy because they are not too far and there are tarred roads to alldirections from the site.

7) This project is engineered for community participation and will widely benefit allparticipants especially farmers and rural community. On the other hand, it will do no harm toenvironment but improve it.

See II article 2 for more detail.

IV. Beneficiary:As mentioned earlier, we have social, economic and environmental problems congregated in

our hands. Nonetheless, that does not mean we ignore the problems or could not solve them. Indeed,many people who live with the problems have tackled them from beginning and keep fighting today.

This project is part of the battle by concentrating on farmers and rural communities. Our aimis to create business and employment opportunities for those of working age through short coursetraining (2.00 months maximum). The course will concentrate on hand on practice and experienceaccumulation to guarantee confidence and work ready for the trainees when they graduate.

Therefore, the project’s beneficiaries are farmers especially those of working age. However,priority will be given to minority tribes, women and disadvantage groups.

V. Objective:Prime objective of the project is to establish positive impact and better future for rural

community socially, economically and environmentally. It comprises with 9 elements regarded asprincipal issues in today rural development. Details described below:

1. To create wealth opportunity to rural farmers through utilization of available resources.

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2. To teach farmers on how to utilize less land for large scale production and big profit.3. To modernize farmers and rural communities in agriculture practice and make them know

how to run their business with low cost, less investment and easy to manage but yield large profit.4. To train farmers on how to begin and make plan, manage and run of their business,

marketing and sale of their produces.5. To establish new opportunity and alternative to all farmers and rural communities:

This is highly important because farmers and rural communities are currently looking for alternativefor their practices. So far, regardless how hard they work, they are still poor. Therefore, they will takethe opportunity and give full cooperation if the opportunity will hand them better future.

6. To help communities in poverty reduction/eradication through production networkthat offers real practice and real result: The project will host short training course (2.00 months perterm) to all qualified farmers. The training will concentrate on hand on practice to guarantee theirexperience, confidence and work ready when they graduate and leave. Project management mightgive the graduates initial fund for mushroom farming so that they can establish their business withinthe network created by the project management. Their produces could either be sold to the project orthrough the project or with the project from their own farms.

We expect all graduates to train members of their communities and set example in agro-economy and rural development through their own actions and practice.

7. To establish production network and commercial forces: The graduates will beorganized into a large production network under an agreement specifically designed for them so thattheir training will bear fruits and produce best possible result. The project management will act ascentral administration and trade facility.

The graduates will not only commit themselves to the network but also strengthen it and makeit grow by training others and recruit their trainees into the network.

8. To take part and participate in biodiversity conservation and environmentaldevelopment through production network, employment, research and development, marketingand sale: This is also important because people will not conduct illegal practices and do somethinghard if they have better alternatives – business and employment. That means slash and burn as well asillegal logging, illegal hunting, bushfire/arson, deforestation and water poisoning will significantlyreduce if not completely disappear.

On the other hand, with cultivation/agriculture budget, we will build a nursery and growplantation in the concessional land offered to the project. In addition, those graduates must take withthem 5 seedling trees each when they return home. They must grow the trees, nurture them up tomaturity and bear fruits.

Furthermore, every year, we will take part in National Tree Plantation Day. We will planttrees from our nursery in the land officially offered to us, nurture them to maturity and bear fruits.

In regarding pollution: Waste water from aquatic farming will not be drained into river orwater carnal but applied on plant and agriculture. Most significantly, in the project site, there will beno rubbish, waste and bad ordure.

9. To take part in commercial agriculture production and make food price cheaper:Today, food price is so high in comparison to community income especially meat, fish and

chicken. Mushroom can be substituted for meat, fish and chicken because it comprises with highprotein but less or no fat. After the mushroom is analyzed for its qualification and documented, priceof meat, fish and chicken will reduce because more consumers will turn to mushroom for cooking.

VI. Strategy:Project strategy bases on 9 business philosophies below:1. Less investment and low cost but quick result and high return.2. Produce only what market demand to guarantee sale and cash flow.3. No illegal practice.4. No harm to environment.

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5. Community benefit and public safety always come first.6. Community participation is not only necessity but a must.7. Participants must be treated with great respect and rewarded fairly.8. Research and development are core elements to move everything forwards.9. Concentration and determination are keys of success.The 9 philosophies could be regarded as 4 cornerstones of the project including management,

consumers, operation and profit. Each article will be analyzed and prioritized in an operation roadmapThe operation roadmap will be followed step by step and utilized in real time. Indeed, the

roadmap represents action plan, should it be carried out correctly it will definitely bring us success,sustainability, stability and growth.

VII. Implementation:1. Operation: All activities will be implemented under strategy plan and operation roadmap.

They will be prioritized and organized into timetable. The activities and working schedule will befixed after being organized and put in place. However, they will be flexible in special cases.

Each activity will be implemented according to the plan determined in the timetable.2. Supervision: All implementation and operation will be under strict control of the project

director. Nevertheless, decentralization will be applied and day – to – day works will be allocatedweekly to field supervisor and assistants for implementation.

3. Decentralization: An organizational structure will be made to determine positions andresponsibilities of all employees as well as participants. Individual employee and participant mustwork on his/her job as defined and commissioned.

4. Legal status: Rules and regulations will be drawn up to govern and determine future of theproject after the grant (if any) ended. Furthermore, the document will clarify legal status and destinyof the project. It will state clearly that the project is not state own or operation but a group ofindividuals who would like to serve and improve living condition of rural communities especiallyminority tribes, women and disadvantage group.

On the other hand, the document will clarify that the project is engineered with commercialstatus and qualification to guarantee cash flow, reasonable size of net profit, sustainability, stabilityand growth after the grant (if any) finishes.

Nevertheless; individuals qualified, selected and enrolled for training will get full support andallowance from the project management including accommodation, food, tools, cloths/uniforms,social security, insurance and funding when they return home.

5. Public relation and propaganda: Rule and regulation indicated in article 4 will includepublic relation and propaganda in which names of project funders as well as their policies toward theproject will be included. This could be regarded as self-publicity and openness.

The self-publication and openness, indeed, will not only be classified in rule and regulationbut also advertising posters and website as well.

The website and posters are principal media for publicity and communication of the project.Nonetheless, we might run advertising via other means should that be cheaper and more effectiveincluding television program sponsor, radio host, newspaper ads, sport event sponsorship etc.

6. Accounting and auditing: To guarantee transparency, financial account will be compiledand edited monthly. Relevant parties can access to the account and bank statements as wanted.

Other accounts will be audited half yearly by independent auditor. This will be made publicfor a month or 30.00 days.

7. Trainees and recruitment: Recruitment of trainees will be conducted according to simpleprocess below:

Age (date of birth): Working age only.Socioeconomic status: Farmer or from rural community. Disable person, woman, minority

tribe and disadvantage group will be given priority.Education level: Not specified.

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Experience: Not necessary.Ethnicity: Lao origin. Minority tribes will be given priority.Assessment and qualification: Application form and interview.Acceptance and enrolment: Fully qualified.

Those admitted for the training course, first of all, will be asked to sign a commitment paperor primary agreement before enrolment. The signed document is legal binding between the trainee andthe project management. Core element of the paper states that after graduation and return home, Iwill train villagers in my community or neighborhood I live what I learnt and trained for with nodiscrimination and free of charge. On the other hand, I will join production network established bythe project management for common good and prosperity.

After enrolment, the applicants will be called trainees or students of the project and must livein accommodation the project management organizes for them. Everybody will have allowance andother benefits from training budget. Their food will be drawn from their training yield includingmushroom, fish, meat and vegetables but rice and seasonings. The management will guarantee thetrainees well-being throughout the training course (2.00 months).

During training, if the trainees perform well and produce good income, the project managerwill reward them with money from net profit plus saving from the allowance (if any) when theygraduate and return home. Nevertheless, throughout the training, the trainees must live their livesunder strict rule and discipline imposed by the project management. Troublemaker will be dismissed.

The training will concentrate on hand on practice to guarantee confidence, experience andwork ready for all trainees when graduate and return home. With these, they – the trainees will be ableto grow mushrooms commercially with little or no help from the project management at home.

2 – 3 trainers will be drawn from the Provincial Poly – Technique Academy. The rest will beeither recruited or invited from other institutions.

8. Production: Production will be carried out by the trainees under supervision of the fieldsupervisor/manager. Indeed, the training is the production and hand on practice is production process.

The project management will organize the trainees into units and hand weekly productiontarget to field supervisor for implementation.

9. Marketing and sale: When mushrooms reach maturity, harvest and sale must be made. Itis time for the project management and sale staffs to work harder and pay special attention; otherwise,the entire hard working throughout previous month could be well wasted and gone with the wind.

All revenue proceeded from the sales will be deposited into project bank account and willonly be withdrawn for project reinvestment and growth. However, after 12.00 months and grant (ifany) finished, the withdrawal will not be subjected to condition defined above.

Note: After 6.00 months operation, we will have produces over supply in XiengkhouangProvince. To solve the problem, we will truck the produces for sale in Vientiane or Vietnam orsomewhere with larger market such as Savannakhet and Pakse. However, according to our marketingstudy recently, we can sell the produces with better price in Vietnamese market.

VIII. Environment:We found this project causes no negative impact on environment because it does not need

land clearing or deforestation, no air pollution, no polluted water, no chemical application, no noise ordisturbing, no bad smell and no rubbish.

Nonetheless, the following actions need to be taken to guarantee clean and green business:1. Sawdust lumps (after growing mushrooms) will be dry under sunshine and burnt for fuel to

steam new lumps. Ash from the burning will be mixed with animal dung and make fertilizer.2. Sawdust for production of lumps will only be from sawmills. We will not log tree for

mushroom farming or produce sawdust lumps.3. The entire project site will be green and clean. The trees will principally be those produce

flowers for bees, fruits for human and thick leaves all year round for environment.See V article 8 for more details.

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IX. Roof hole and opportunity:As mentioned earlier, many types of mushrooms in Xiengkhouang Province are highly

delicious and can be sold as high price as $200.00/kg overseas. The most popular one is knownlocally as HETVAI. Research and spore extraction have not yet been conducted on this mushroom sofar. This could be regarded as roof hole and opportunity as well as challenges for the project.

Nevertheless, we determine to extract spore of the mushroom and farm it successfully by theend of 2017 if we get funding as budgeted and the project is implemented.

Mushroom farming will step forward at least another mile should we succeed in extracting ofthe HETVAI’s spore because demands for the mushroom in China, Japan, Vietnam and others arehigh. With the success of spore extraction and farm the mushroom, the demands will be all met. Asthe result, income of those participants will rise significantly and some will become rich or very richor even millionaire.

On the other hand, demand for mushrooms in Vietnam is very high and Vietnamese market isvery large. We can never-ever supply the demand in full. However, if the project is implemented, webelieve that we will be able to truck our farmed mushroom to Vietnamese market by the end of 2018.Mushroom farming after that could well become huge industrial operation that nobody could predictits result and outcome.

X. Risk and risk management:Risk is probability and always around us. We can manage it but we cannot get rid of it

completely. Indeed, it is uncertainty that might or might not materialize. However, if it happens, itsvictim could well sink into bottom of bankruptcy or even death.

Fortunately, we can manage the risk and prevent it not materialize if we live with it with fullunderstanding.

Our project is not exceptional and comprises with many risks. Nonetheless, only four havegreater chance for materialize. They are policy risk, social risk, legal and political risk, marketing andfinancial risk.

Other types of risk such as natural disaster, physical risk, production risk and others could notbe ignored and must take into consideration though they bear less chance for materialize.

More details described below:1. Policy risk:This type of risk includes unfair dismissal, abusing of power, persecution, immoral practice,

corruption, indiscipline, irresponsibility etc.To manage this risk, the project manager needs to have good management skill, strong moral

commitment and impartial. Most importantly, he/she must know how to place right person for theright job and motivate subordinates without prejudice.

Furthermore, workplace agreement and employment contract must be drawn up for individualemployee so that he/she will be confined to his/her own seat and do his/her job as determined withoutinterference of others.

On the other hand, policy and business plan with clearly defined goal and strategy must bedrawn up. Relevant parties must place their signatures on the paper and make it legal binding.

The written contract is best possible management for this type of risk because human nature iscomprised with hatred, jealousy, partiality and high poppy syndrome.

2. Social Risk:This type of risk includes no-cooperation, no-participation, ignorance, harassment, abusing,

insulting, trouble making, nepotism, sarcasm etc.To manage this type of risk, the project manager must have strong leadership and public

relation skill because it principally involves with community and general public. To bring people tothe project and make them participation, good diplomacy and communication skill are needed. Mostimportantly, the project manager must be man/woman of the people and gives them trust.

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3 Legal and political risk:This type of risk includes court/legal action, fine/punishment, imprisonment, nationalization,

seizure, force closure etc.To manage this type of risk, we have to operate and run the project after formal approval. At

the same time, we need only conduct and run activities approved. Most importantly, we will operateand run the project within the law/legal permits. On due date, we have to complete a formal report torelevant authorities as required.

4. Marketing and financial risk:This type of risk principally involves with cash flow and operation cost. Subsequently,

marketing and sale become prime issue of this risk. Indeed, money is everything in business includinglife and death. Our project is no exceptional. Therefore, this type of risk cannot be treated lightly.

To manage this type of risk, the project manager needs to establish market in many locationsand always have full updated information about supply – demand in every market. With manymarkets and the information about supply – demand, the manager can make good judgment aboutproduction, marketing and sales. As the result, the risk will reduce greatly and significantly.

On the other hand; based on scientific research and study, advertising, promotion andmarketing campaign need to be done very often in order to keep existing consumers/customers andbring in new customers/consumers to mushroom consumption instead of meat, pork and poultry.

At present, we already have some markets in the list for our produces including local market,Vientiane market, Savannakhet market, Pakse market and overseas market (Vietnam). Because wehave already had markets in our list, we have little worry about this risk.

XI. Success, sustainability and growth:1. Success:To guarantee success, we will bring on board expertise, knowledge, experience, skill, and

qualification about mushroom farming from various sources for implementation including relevantgovernment authorities and institutional education. Therefore, we include in this proposal trainersfrom Provincial Polytechnic Academy, technical officers from Phoukout District Agriculture andForestry Division, Lord May of Phoukout District, accountant, auditor, designer, builders and farmers.

We believe that many hands make things work and many heads (with the same goal) can dojust anything. Our project is no exceptional.

On the other hand, success defined by outputs and net profit. Our feasibility study determinesoutputs and project proposal clarifies policy and action plan of the project. To achieve as figured outand determined in paper; formal/official approval, cooperation, participation, good leadership, strongmanagement and financial backing are must.

2. Sustainability:Sustainability can be proved by continuation of the project after financial grant or financial

aid or loan ended. Indeed, the best possible prove of sustainability is time. See XII for more details.3. Growth:Growth determined by increase of outputs and net profit. To increase of outputs and net

profit, production and raw material for production also need to be increased. In our feasibility study,during first 12.00 months of project implementation, we set target to increase sawdust lump (forgrowing mushrooms) 15,000.00 units per month. The increase will not cause work overload to ourproject because there will be at least 25.00 boarding/fulltime trainees to carry out the job every day.

Quantity of produce will definitely increase in parallel with the number of the sawdust lumpsthat increase every month throughout the year. We name this type of increase as Primary Growth.

Another growth is called Principal Growth. This growth is realized when trainees graduate,return home and grow mushroom for sale under agreement they sign with the project management.Production of this type is called Network Production. The project management will act as networkmanagement and run administration works from the project’s office. This type of growth will multiplyvery quickly because there will be many people working together for common good.

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The growth will even be quicker and larger when farmers and rural communities see benefitof mushroom farming and replicate the activities. Nevertheless, although production is large andquantity of produce is huge, we will not afraid of over supply because we can export the produces toVietnam, China and others.

Both the Primary and Principal Growth will become key ingredients in wealth creation andpoverty reduction in rural communities.

All above represent success, sustainability and growth of the project. They will not come withless effort but cooperation and dedication of all individuals and parties involve.

XII. Future of the project after the grant finishes:Question is what will happen after the grant finishes? Will the project continue and who will

fund it? The questions are serious and tough but fair and justified because like it or not project fundersand relevant parties will raise them anywhere.

Nonetheless, as grant recipient and project implementer, we have answer below:1st year: We have grant for investment and running cost in first 12.00 months operation. We

will take advantage of this opportunity to establish an insurance and security for the project after grantends. The insurance and security include large and solid business infrastructure such as productionnetwork, good governance, strong leadership, competent staffs and management, transportation,marketing network etc. Most importantly, we will turn the grant into effective operation and largecash amount in bank account to guarantee future cash flow and reinvestment after the grant finishes.

2nd year: The project will continue after the grant finishes by utilization of the cash account asindicated above for operation cost and investment.

3rd year and beyond: The grant has long ended but the project will keep running andcontinue. We will utilize net profit as spending cost and reinvestment.

However, although independent and debt free operation above is proposed as first choice, wemight apply for new grant or loan or combination of both for project operation. If this is chosen,money in project bank account will be manipulated for other purpose. This option is widely practicedand highly popular in business world. Nonetheless, we might or might not follow the lead.

The project will keep running and continue after grant finishes regardless because at the timewe will have large cash reserve in bank account and over one hundred participants. The two elements– reserve and graduated trainees will not only keep the project running but also make it grow andprosperous further as well.

XIII. Women and minority tribes benefit:1. Women benefit:By law and politics, men and women are equal. In reality, in rural communities, women are a

lot busier than men because they not only do house works and look after children but also farm worksand other chores. These cause women usually stay home and earn little income. Nonetheless, thoughthey earn not much but their spending is relatively high because they need to look after children,family and themselves. In many cases, rural women bear little or no education. Subsequently, they arenot well educated – even illiterate.

Mushroom farming is highly suitable for women because it is conducted in house – not undersunshine or in the rain. House for mushroom farming can be constructed in their back yard oranywhere possible close to family home. Building materials can be obtained with low cost or for freebecause they are widely available in rural area such as bamboos and lalang. Therefore, women can dotwo works at the same time – growing mushrooms for sales and tending the house.

Mushroom farming will widely change women role economically and commercially becausethey will be growers, traders and earn the money. That means, when this project is implemented,though they are at home they will also earn income and have money because they can conductbusiness from their own home. Furthermore, many women will not only stay home and growmushrooms but also trainers and instructors as well.

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Most significantly, mushroom farming will change ordinary women to ladies because theywill have spare time for makeup and look after themselves instead of busying with endless houseworks and chores.

2. Minority tribes’ benefit:Minority tribes such as Hmong and Khmu generally do not have stable farmland but practice

mobile slash and burn. Their crops yield from the practice is, unfortunately, minimal and usually doesnot last for whole year. Indeed, the slash and burn practice is not only uneconomical but also causessocial and environmental destruction, at least in part.

The slash and burn practice is hard and difficult jobs but those carry out the practice arerewarded very little. Everybody knows this and nobody wants to do the task. Unfortunately, becauseof economic reason, many force themselves into the practice.

We found mushroom farming is the most qualified and suitable for solving the practice atpresent because it is carried out in house and defined location. Furthermore; unlike other type ofagriculture, mushroom farming does not need a lot of land for large production. Significantly; it ishighly convenient, simple, cheap and easy to run because farmers do not need to toil the land underheat sunshine or in wet-cold of rain or walk up and down steep hills for any reason.

Therefore, mushroom farming will not only make life in rural communities better but alsoimprove environment and biodiversity because the hill tribe minorities will cease slash and burnpractice permanently. On the other hand, illegal practices such as illegal logging, illegal hunting andso on will reduce significantly – even ended because most in rural communities will concentrate onmushroom farming and do the right thing. Only few, if any, will participate in the illegal practices.

The mushroom farming, indeed, will not only improve living standard of the hill tribeminorities economically but also their reputation, qualification and social benefit because most willstop slash and burn and illegal practices permanently.

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XIV. Target and indicator:Figures indicate in the following table are target we believe we can achieve because they are

estimated from low to middle level of yield certified by various parties such as mushroom farmingtrainer, mushroom traders, fishmongers, grocery owners, farmers, hill tribe minorities and governmentofficials.

Please note that the figures are based on 12.00 months production and only during grantimplementation. They are drawn up as baseline and indicator for future production, trade and income.

Activities Yield target Unit typeValue

$Indicator

Mushroom farming 156,750.00 Kilogram 391,875.00Quantity of mushroom yields,sale & cash in bank account

Training 150.00 Person 30,000.00Graduated trainees & takepart/join production network

R & D 12.00 Month 6,000.00Spore of HETVAI extracted& commercially farmed

Spore extraction 10,000.00 Bottle 10,000.00Quantity of spore extracted &grown successfully

Pig farming 100.00 Head 5,000.00Number of pig killed forconsumption or sale

Poultry farming 2,000.00 Head 1,000.00Number of poultry killed forconsumption or sale

Fish farming 3,000.00 Kilogram 2,000.00Quantity of fish harvested forconsumption or sold

Flog farming 2,000.00 Kilogram 2,000.00 Quantity of frog harvested forconsumption or sale

Vegetable farming 30,000.00 Kilogram 6,000.00 Quantity of veggies harvestedfor consumption or sale

Nursery 2,500.00 Seedling 3,000.00Number of seeds germinated& grow up as trees/plants

Plantation 1,000.00 Tree 1,000.00Number of trees planted,grow up & bear fruits

Land development &site decoration

5.00 Hectare 5,000.0Project site is fully developedand economically used

Renovation, building &construction

≈ 3,500.00 Squaremeter

152,800.00The very much rundownbuildings are fully renovated& commercially used

Production/farmingnetwork establishment

150.00 Person 30,000.00Number of participants &quantity of produces/outputs

Marketing & sales 12.00 Month 12,000.00Wholesale/retail outlets,revenue earned, net profit &money in bank account

Please note that our target for breakeven and making profit is from the end of 18.00 months operation.

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XV. Organizational Structure:

Partner, consultant &project coordinator

Project directorDaophachanhPhetsayarat

Field SupervisorPhomma Dalasaeng

Trainees Production network

Trainers, advisors,contractors

Business director

Truck drivers

Office staffs: finance,treasurer, clark,

Accountant, purchase,sale, public relation

Chef, general hands

Accountant & auditor

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XVI. Agriculture and livestock:1. Agriculture:As mentioned earlier, this project will concentrate on mushroom farming. Nevertheless,

agriculture will also be included as additional and support activity of the project operation. It willprincipally concentrate on in house green vegetable farming and wet season produces such as corns,pumpkin, gourd, luffa, roots, asparagus etc. The activity will become part of the training as well as R& D of the project. Through the budget allocated for the R & D; we will find ways on how to makeagriculture simple, cheap, convenient, economical and commercially as viable as mushroom farming.

The agriculture produces will be mainly for the trainees consumption.2. Livestock:Like agriculture, livestock will also be on board as supplemental and supporting activity of

the project operation. This includes pig farming, poultry farming and aquaculture. It will be part of thetraining curriculum as well as R & D of the project.

The activity will be established principally for demonstration and research rather thancommercial purpose. Produces yield from this activity, like those proceeded from agriculture, will bemainly for the trainees consumption.

Through the budget allocated for the R & D, we will find ways on how to make livestockbusiness easier, simpler, cheaper, more economic viable and commercially sufficiency.

XVII. Funding and source of fund:This project, via Phoukout District Agriculture and Forestry Division, is originally compiled

for grant. The original plan still hold and expectation for the grant for implementation of the project isno change. Therefore, after getting formal approval, we will approach various funders with the formalapproved document for funding.

However, we will primarily seek advice from the lord mayor and head of the agriculture andforestry division about grant that central government made available to district. If available, it will beapproached immediately.

Nonetheless, the government will not be the only source we will approach first hand. Inreality, we will contact many possible funders worldwide including NGOS, international developmentfunds and commercial banks.

It is very difficult to seek funding overseas; however, with our willingness, honesty, clearvision and defined objectives things would be alright.

XVIII. Other comment:As indicated, this project welcomes various parties including farmers and disadvantage group

for implementation and carry out its activities. Significantly, two government institutions – theProvincial Polytechnic Academy and Phoukout District Agriculture and Forestry Division not onlyplay big role in the project but also act as implementing partners. The followings define role andfuture of the parties participate in the project including the two implementing partners.

1. Grant implementation period is limited within 1.00 year or 12.00 months.2. The implementing partners remain for another 12.00 months after the grant finishes.3. The implementing partners share 5.00% of two years net profit after tax.4. Project coordinators and consultants as well as their wages ceased when the grant finishes.5. Project owners keep running the project and doing business after the grant finishes. When

the project becomes public company or incorporation, the owners will become principal shareholders.6. The project manager/director and staffs will keep running the project after the grant

finishes for protecting benefit and interest of the rural community as well as the graduated trainees.7. The project will keep open its door to welcome volunteers, trainees, apprentices and

general public after the grant finishes and it becomes public company.8. The project manager/director will act as central administration for training, production

network, marketing, distribution, sales, R & D etc as long as the project/company remains.

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9. Role of the trainers and their wages end when the project/company turns two years old.10. Parties participate in the project need to carry out their jobs as defined in the agreement,

otherwise, voluntarily resign. If he/she does not resign, the project manager/director will considerhis/her future in the project. The project manager/director reserves the right for the decision.

11. All assets of the project will be kept in place and nobody is allowed to remove the assetsfor any reason when the grant finishes and the project become public company.

12. The project will become public company within 1.00 year after the grant finishes.Nevertheless, it will keep serving its original purposes and welcomes public.

13. Throughout 24.00 months, the implementing partners must participate in planning andimplementing of the project. Nonetheless, the project manager/director reserve all right for finaldecision.

14. This project has direct link to Phoukout Tourism Resource Area because it locates rightinside the defined zone and not far from the Phoukout itself. Furthermore, the project site stands rightat the side road up and down the Phoukout. Therefore, the site needs full renovation and a lot of facelift. At present, the site is overgrown and the structures are very much run down.

XIX. Application for government concession and exemption:This project comprises with four principal development strategies of the government below:1. Education and human resource development/skill improvement.2. Commercial farming/commercial agriculture.3. Rural development and poverty reduction/eradication.4. Biodiversity protection and environmental development.Because the project comprises with the four strategies above, as project owners and

management, we are applying concession and exemption below from the government.Please note that some applications below might not be applied in other countries.1. Income tax (personnel):Exemption applied for 2.00 years or throughout grant implementation period plus another

12.00 months. The exemption will be great helpful because it will help us to organize and put thingsin order especially financial matters.

2. Net profit tax:This project is organized as educational and skill improvement institution. Its aim is to help

farmers/rural communities, women, minority tribes and disadvantage groups through short coursetraining with hand on practice. In this document, the course will be run for only two months. In future,we plan to develop it to a degree level that might take up to five years for graduation. Students at thetime will principally be children from rural community and minority tribes. It will be boarding schoolwith full scholarship for all qualified and selected individuals.

With such defined goal and objective, we are applying for net profit tax exemption from thegovernment under current strategy on education and human resource development.

We will apply for a teaching permit from the provincial education department or evenministry for education before the project will be in full operation.

Nevertheless, though the course will be evolved and changed but nature of the practiceremains. That means at least 50.00% of the curriculum will be spent on hand on practice to guaranteeconfidence, work ready, experience and wellbeing of the students/trainees. When graduated, they willhave full qualification and everything ready for self-employed or employers. The qualification in thisdocument; apart from knowledge, confidence, work ready and experience it also includes money,equipment and support from the management.

Subjects that will be on board for the future long term training and education include Lao,English, Mathematics, Business Management, Agriculture Science and Engineering, Law, ComputerScience, Chemistry, Physic, Accounting and General Study. More details will be proposed later.

The government tax exemption on this matter will be great help in paving way to ultimategoal and objective of the course.

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3. Income tax (business operation):Exemption for this tax is applied as the net profit tax because they are in the same category.4. Import and export tariff (for goods or items related to or applied on the project):Exemption for this tax is applied as the net profit tax because they are in the same category.5. Goods and services taxes (GST):Exemption for this tax is applied as the net profit tax because they are in the same category.6. Service fees and documentation:Exemption is applied for 5.00 years.7. Land concession fees/least hold:Exemption is applied for 5.00 years.8. Others:

1) Study and give a formal approval of this project.2) Issue concessional right certificate for the land at Khoum Napoung – The FormerWartime Leaders Complex, Ban Phouvieng, Phoukout District, XiengkhouangProvince, Laos to the project as per application lodged.

XX. Conclusion:This project is named New Agriculture Alternative and Development. It specifically

designed for farmers and rural communities. It is skill improvement and training facility but operatedin full commercialization. With commercial practices, the project will earn income and could stand onits own feet. Nonetheless, those qualified for the training course will not pay for course fee but get fullsupport and assistance from the project management including food and accommodation. Women,minority tribes and disadvantage groups will receive special treatment and priority for enrollment inthe training course. The training, in this document, will concentrate on hand on practice to guaranteeknowledge, experience, confidence and work ready for the trainees when they graduate and leave.

The project is originally engineered for grants and aids from international development fund,NGOs and the Lao government. However, funding for implementation of the project might also comefrom commercial bank loans and government budget.

. The principal activity of the project is mushroom farming though conventional agricultureand livestock are also included as complementary activities. We take mushrooms farming as corepractice of the project because it is found as new alternative for conventional agriculture that offersvery little help in rural economic development and poverty reduction.

Qualification and benefit of mushroom farming are as below:1. Low cost for investment.2. Cheap to run.3. Quick result.4. High return.5. Relaxing practice.6. Easy to run and manage.7. Can be practiced all year round and earn all year round.8. High demand locally, nationally and overseas.9. Business opportunity is huge and no limit.10. No pollution but environmentally friendly.11. Most significantly, mushroom farming does not need a lot of land for producing

large quantity of produce because, unlike other type of agriculture that scattered onland surface, it stacks up on top of one another.

All these indicate that mushroom farming can make ordinary farmer rich or at the very leastcomfortable life if he/she works as hard as rice or vegetable farming practice.

This project needs ≈ $650,000.00 for implementation.

The funding originally will be applied for grant; if not succeed, loan from the government orcommercial banks will be alternative. Time period for implementation of the fund (either grant or

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loan) is 12.00 months or 1.00 year.Relevant government officials and interested parties, after studying the document, if you have

any comment or need further information, please contact project originator and director from detailsprovided below:

Full name: Daophachanh Phetsayarat.Address: House No. 37, Unit 2, Ban Paen, Phoukout District, Xiengkhouang Povince, Laos.Telephone: +856 20 55396175E-Mail: [email protected]

Project originator and director

Daophachanh PhetsayaratDate: 25 November 215

Feasibility Study

NEW AGRICULTURE ALTERNATIVE AND DEVELOPMENTKhoum Napoung, Ban Phouvieng, Phoukout District, Xiengkhouang Province, Laos

Feasibility StudyI. BUDGET

1. INVESTMENT

Order Type of investment Unit type No of unitCost/unit Total cost

RemarkUS$ US$

1 Mushroom farm house m² 1,500.00 40.00 60,000.00 Renovating the very much rundown buildings for mushroom farming

2 Accommodation m² 400.00 50.00 20,000.00 For the management and trainees, it is also renovating the old buildings

3 Office m² 150.00 50.00 7,500.00 This is project office, it might be in the same building with classroom

4 classroom m² 100.00 50.00 5,000.00 For learning and teaching, it might share the same building with office

5 Kitchen m² 100.00 40.00 4,000.00 In the building: trainee kitchen, sawdust dump, sawdust lump preparation

6 Warehouse m² 250.00 40.00 10,000.00 It might share the same building with the departure depot

7 Departure depot m² 100.00 40.00 4,000.00 It might share the same building with the warehouse

8 Bathroom m² 50.00 50.00 2,500.00 Male and female share the same building but separated by brick wall

9 Toilet room 12.00 300.00 3,600.00 Three location, separate male - female, we might renovate the old ones

10 Demonstration hut hut 4.00 300.00 1,200.00 5.00 m x 5.00 m, simple materials, for mushroom farming demonstration

11 Fence hectare 10.00 1,500.00 15,000.00 Barbwire, concrete pole, mess enforcement, steel gate, nail, guard hut

12 Water system 1.00 20,000.00 20,000.00 Above ground container, pump, pipe, tap, water tube, shower, springer

13 Power system 1.00 5,000.00 5,000.00 Electric pole, meter, electric wire, accessories, labour

14 Heavy truck unit 2.00 30,000.00 60,000.00 2nd hand in good condition or repairable would be okay

15 Motor bike unit 2.00 2,500.00 5,000.00 For field service and short distance travel

16 Office equipment set 1.00 6,500.00 6,500.00 Computer, photo copier, printer, fax/telephone equipment, table, chair etc.

17 Machinery and tools set 1.00 10,000.00 10,000.00 Spore extraction box, pressure cooker, tools, mini tractor etc.

18 Steamer unit 5.00 100.00 500.00 Self-made steamer or empty oil drum

19 Advertising board site 6.00 500.00 3,000.00 Elected advertising boards, we plan to establish in six locations

20 Kitchenware set 1.00 5,000.00 5,000.00 This includes cooking ports, freezer, fridge, dishes, bowls, spoons etc.

Total - - - - $ 247,800.00 In Lao Currency/kip = 2,031,960,000.00

2. EXPENSES

Order Expensed items Unit type No of unitCost/unit Total cost

RemarkUS$ US$

1 Sawdust ton 100.00 20.00 2,000.00 For both production of sawdust lumps (for growing mushroom) and fuel

2 Plastic bag kilogram 500.00 5.00 2,500.00 For sawdust filled & making sawdust lumps (for growing mushroom?

3 Spore bottle 10,000.00 1.00 10,000.00 This is heart and soul of mushroom farming. We might produce ourselves

4 Ingredient set 1.00 3,500.00 3,500.00 Lime, gypsum, caustic soda, bran, broken rice, plastic ring, foam cases …

5 Fuel/petrol liter 15,000.00 1.50 22,500.00 Diesel and gasoline. For transportation and travel

6 Meeting & travel time 4.00 1,000.00 4,000.00 Once for every three months including perdium and accommodation

7 Marketing month 12.00 1,000.00 12,000.00 Retail outlet, advertising, labeling, analyzing etc.

8 Processing month 12.00 1,500.00 18,000.00 Drying, milling, canning, packaging, preserving, decorating etc.

9 Design & inspection person 1.00 5,000.00 5,000.00 This specifically means construction design and inspection of the works

10 Documentary & fees month 12.00 250.00 3,000.00 This includes border pass, produce certification, parking fees etc.

11 Consultant/coordinator person 2.00 6,000.00 12,000.00 $500.00/person/month. Lord Mayor and A.F.D of Phoukout District

12 Staff person 12.00 6,000.00 72,000.00 Truck driver, accountant, salesperson, chef etc. $500.00 /person/month

13 Field supervisor person 3.00 7,200.00 21,600.00 $600.00/month

14 Trainer person 6.00 7,200.00 43,200.00 $500.00/month/person. 2 trainers might be invited from Thailand

15 Director/manager person 1.00 30,000.00 30,000.00 $2,500.00/month

16 Deputy director person 2.00 12,000.00 24,000.00 $1,000.00/month

17 R & D month 12.00 1,000.00 12,000.00 The budget will principally be spent on local mushrooms spore extraction

18 Site decoration month 1.00 5,000.00 5,000.00 Landscaping, road repair, tree plantation and site decorating

19 Auditor term 2.00 2,500.00 5,000.00 Twice per year. Fully certified and independent company will be hired

20 Valuation/assessment month 12.00 300.00 3,600.00 A.F.D District, A.F.D Province, Poly-Technic Academy of the province …

21 Training term 6.00 5,000.00 30,000.00 25.00 trainees/term, $100.00/person/month

22 Agriculture month 1.00 10,000.00 10,000.00 Soil preparation, seeds, fertilizer, plastic sheet, nursery, shade etc.

23 Livestock month 1.00 10,000.00 10,000.00 Fish, frog, poultry and pig. Most will be raised for self-consumption

24 Insurance year 1.00 7,000.00 7,000.00 Life, health, social security, assets and business

25 Others month 12.00 1,000.00 12,000.00 Administration, general expenses, preliminary expense and reserve

Total - - - - $ 379,900.00 -

In Lao currency/kip = 3,115,180,000.00

II. SELF CONTRIBUTION

Order Specification Unit type No of unitCost/unit Total cost

RemarkUS$ US$

1 Truck 3-ton 1.00 6,000.00 6,000.00 6 - Hyundai - 1996

2 Computer laptop 2.00 700.00 1,400.00 In good condition

3 Printer razor 1.00 100.00 100.00 In good condition

4 Camera hand-held 2.00 120.00 240.00 In good condition

5 Buildings (old) m² 3,000.00 10.00 30,000.00 They are very much rundown but can be renovated

6 Land hectare 5.00 3,500.00 17,500.00 Concession for 30.00 years and can be extended twice

7 Management person 1.00 10,000.00 10,000.00 Graduated in Australia and work overseas for decades

8 Personnel person 7.00 5,000.00 35,000.00 Including trainers and field supervisor

Total - - - - 100,240.00 -

III. YIELD AND REVENUE

Month*Sawdust lump togrow mushroom

Yield Total yield Sale price Total revenueRemark

kg/lump kg US$/kg US$

1 20,000.00 - - - - There is no sale first month

2 35,000.00 0.15 3,000.00 2.50 7,500.00 Mushroom grown 1st month sold in 2nd month

3 50,000.00 0.15 5,250.00 2.50 13,125.00 Mushroom grown 2nd month sold in 3rd month + 1st month stump

4 65,000.00 0.15 7,500.00 2.50 18,750.00 Mushroom grown 3rd month sold in 4th month + 2nd month stump

5 80,000.00 0.15 9,750.00 2.50 24,375.00 Mushroom grown 4th month sold in 5th month + 3nd month stump

6 95,000.00 0.15 12,000.00 2.50 30,000.00 Mushroom grown 5th month sold in 6th month + 4nd month stump

7 110,000.00 0.15 14,250.00 2.50 35,625.00 Mushroom grown 6th month sold in 7th month + 5th month stump





12 185,000.00 0.15 25,500.00 2.50 63,750.00 Mushroom grown 11 month sold in 12th month + 10 month stump


14 195,000.00 0.15 29,250.00 2.50 73,125.00 The growth ends and produces yield at this level indefinitely











Total - - 506,250.00 - 1,265,625.00 -

*Farming area = 1,500.00 m² Max lump =195,000.00 Mushroom lump/m² = 130.00

Number of trainee/worker = 25.00 person/term Max lump =195,000.00 Mushroom lump/person/month = 7,800.00

Mushroom lump/person/day = 354.55

Number of steamer = 5.00 units Max mushroom lump = 195,000.00 Mushroom lump/steamer/month = 39,000.00

Mushroom lump/steamer/day = 1,772.73

≈ 444.00 lumps/round. Each round = 3 - 4 hours

Steaming round/day = 4.00

IV. REVENUE AND NETPROFIT

MonthRevenue ¹Investment

*Depreciation²Expenses ³Net profit

US$ ⁴Construction ⁵Equipment Total/US$ ⁶Personnel General ⁷Essential ⁸Necessity ⁹Others Total/US$ US$

1 - 26,300.00 90,000.00 116,300.00 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 - 31,723.33

2 7,500.00 26,300.00 - 26,300.00 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 - 24,223.33

3 13,125.00 26,300.00 - 26,300.00 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 - 18,598.33

4 18,750.00 26,300.00 - 26,300.00 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 - 12,973.33

5 24,375.00 26,300.00 - 26,300.00 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 - 7,348.33

6 30,000.00 26,300.00 - 26,300.00 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 - 1,723.33

7 35,625.00 - - - 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 3,901.67

8 41,250.00 - - - 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 9,526.67

9 46,875.00 - - - 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 15,151.67

10 52,500.00 - - - 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 20,776.67

11 58,125.00 - - - 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 26,401.67

12 63,750.00 - - - 2,065.00 14,900.00 1,000.00 1,500.00 8,425.00 3,833.33 29,658.33 32,026.67

13 69,375.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 38,651.67

14 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

15 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

16 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

17 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

18 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

19 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

20 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

21 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

22 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

23 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

24 73,125.00 - - - 2,065.00 13,900.00 1,000.00 1,500.00 8,425.00 3,833.33 28,658.33 42,401.67

Total 1,265,625.00 157,800.00 90,000.00 247,800.00 49,560.00 345,600.00 24,000.00 36,000.00 202,200.00 92,000.00 699,800.00 516,265.00

Figures in the table indicate that the project will breakeven and make profit after 18 months operation Revenue from 1st - 18th month = $ 826,875.00

Investment from 1st - 18th month = $ 247,800.00

Expenses from 1st - 18th month = $ 527,850.00

Depreciation from 1st - 18th month = $ 37,170.00

Money/cash left over after minus investment, expenses and depreciation (net profit) at the end of 18th month = $ 14,055.00

Cash at bank at the end of two years operation:

Cash at bank at the end of 12.00 months operation = total revenue (because investment and expenses come from grant) = $ 391,875.00

Cash at bank from 13th - 18th month = $ 208,258.33

Cash at bank at the end of 18th month (add back depreciation) = $ 637,303.33

Total cash at bank from 19th - 24th month (add back depreciation) = $ 309,201.67

Cash at bank at the end of two years operation = $ 946,505.00

In Lao currency/kip with $1.00 = 8,200.00 7,761,341,000.00

Dividend allocated for implementing partners:

Net profit at the end of 24th month operation = $ 516,265.00

5.00% of net profit for the Provincial Poly Technic Academy = $ 25,813.25 The Academy might spend the money on its discretion.

5.00% of net profit for the A.F.D of Phoukout District = $ 25,813.25 The A.F.D might spend the money on its discretion.

Total dividend for the implementing partners = $ 51,626.50

Net profit after dividend = $ 464,638.50

Cash at bank after dividend = $ 894,878.50 80.00% of the amount will be allocated for reinvestment

Remark: 20.00% of the amount will be allocated for reserve¹Construction must be completed in 6.00 months. Procurement must finish within 1.00 month.

²Average per month from total amount.

³Net profit = Revenue - Expenses (excluded investment).

⁴Items include houses for growing mushroom, accommodation, office, classroom, kitchen, warehouse, departure depot, bathroom, toilet, mushroom demonstration hut, fence, water and power system.

⁵Items include heavy truck, motorbike, office equipment, machinery and tools, steamer, advertising board and crockeries.

⁶Sum of salaries and wages of all personnel divided to 12.00 months.⁷Sum of amount spent on sawdust, plastic bag, spore and necessities divided to 12.00 months.⁸Sum of amount spent on fuel/petrol, marketing, processing, documentary and fees, R & D, valuation and assessment and training divided to 12.00 months.⁹Items include travel and conference/meeting, design and inspection, landscaping and site decoration, auditing, agriculture, livestock and insurance.

*Amount= 10.00% per year divided to number of months in a year that = 12.00

Recommendation PicturePic 1

Tending mushroom farmhouse 04/03/2016

Pic 2

Tending cauliflower and broccoli farm 04/03/2016

Pic 3

Tending root farm 04/03/2016

Pic 4

Officially approved site with some of the structures for mushroom farming proposed in this document 04/03/2016

Pic 5

Infrastructure and road access to the site 04/03/201

Pic 6

Water resource for the project about 100.00 meters from the site; it is a relatively large river that flows all year round. 04/03/2016

Supplemented Photos

The following photos were taken while training and practicing of mushroom farming in various stages of the project.I. Sawdust base mushroom farming and oyster mushroom is principal farmed species.

1. Primary step – trainees gathering with sawdust sacs.

2. Sorting of sawdust.

3. Mixing ingredients including lime, gypsum, rice bran, salt and water.

4. Sawdust lumps preparation.

5. Sterilization of sawdust lumps. It takes up to 4.00 hours steaming in the drums.

6. Cooling room. The sterilization heats up the lumps. They need to be cooled down before planting.

7. Spore planting (between 3.00 and 5.00 grains per lump/bag).

8. Nursery and farmhouse. The place must be relatively dark and wet to allow mushroom growing.

8. Mature mushroom and ready for harvest. It takes 35.00 days after the spore planting.

Note:

We trained young farmers and villagers (some from school) to farm mushroom as presented in thephotos. Its results are highly satisfied and participants happy. However, from now on, the sawdustbecomes scarce because the government stops logging permit and sawmills close.

Therefore, we invented new approaches by utilizing soft-waste woods as tree-branches and paddyhay as base-materials instead of sawdust. However, we prefer the tree-branches and cast aside thepaddy hay at present because the woods bear characteristics below:

1. Easy to find.2. Easy to do and handle.3. No sterilization is needed for the logs/tree-branches.4. The logs last for very long time. It takes years for the woods to be rotten and replaced.5. The mushrooms grow on logs/tree-branches offer better taste and are highly delicious.6. Though it takes longer (up to 4.00 months) for mushroom to grow and see results but yields

are not very much different from of those farmed on sawdust.7. In general, the woods offer lower investment cost and better benefit in long run.

See next pages for details.

II. Soft-waste woods mushroom farming with white and brown mushroom as principal species.Please be noted that this approach has not yet been widely trained to farmers and villagers. Nonetheless, its process is alot easier and simpler than the one made on sawdust and paddy hay.

1. Softwoods/tree-branches gathering and preparation. Please be noted that the logs are not hardwood or toxic or pine species. It might be good to find the only tree species that accommodate

mushrooms in the wild without human intervention. In the picture, we took the logs from forest andleft them in the old house for about 3.00 weeks before dealing with them for next step.

2. Boring round holes on the log with 1.00 centimeter across center point using hammer-peck ordrill, spore planting and closing the holes with caps (or plastic coke as seen in the photo) after it isabout 60.00% dry. If the log is completely dry as firewood, we need to leave the log in water for

24.00 hours after the spore is planted. Otherwise, it won’t work and waste. On the other hand, barkof the log must be intact as seen in the picture. We used wild native tree nut for experiment and it

works out relatively well. See next photos for more details.

3. Leaving the logs in shading place and make them wet 70.00% all the time for mushroom todevelop and grow up. It takes up to 4.00 months for first generation of mushroom to spring up onthe woods and ready for harvest. Then, the mushroom will keep growing up and harvest could be

made daily until the logs rotten away and replaced.

4. Another example of mushroom grown on logs. This is called BROWN mushroom.

5. And another example of mushroom farmed on logs. This mushroom species is highly common andpopular in our market. Now we can grow and make it widely available everyday all year round.

Project organizer and presenter –ອາຈານ Daophachanh Phetsayarat

Documents

New Agriculture Alternative and Development...New Agriculture Alternative and Development Khoum Napoung, Ban Phouvieng, Phoukout District, Xiengkhouang Province, Laos Community Base