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A Sample of Marketing Plan for Vegetable Oil document sample
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SAMPLE PLAN OF OPERATION
FOOD FOR PROGRESS
1. Name and Address of Applicant
Organization Name: ABC, Inc.
Contact: John Smith, Program Officer
1400 Independence Ave.
Washington, DC 20250
Telephone: 000-111-1111
Fax: 000-111-2222
Email: john.smith@abc.net
In-country contact info:
Jane Doe, Country Director
333 Anywhere St.
Suite 3
Cristobel, Elbonia
2. Country of Donation
Elbonia
3. and 4. Kind and Quantity of Commodities Requested and Delivery Schedule
Please complete the following table:
Commodity Use of Quantity Requested Requested (Bulk (Bulk only)
Commodity in Metric Package Size delivery only) Are Are extra
(monetization, Tons date at bags bags
barter, food (MT) U.S. Port /needles/ requested?
for work, twine (yes/no)
direct feed) (BNT)
requested?
(yes/no)
Soybean Oil Monetization 3,000 20 Liter Can 4/2011
Soybean Meal Monetization 5,000 Bulk 4/2011 Yes Yes
5. Program Description
(a) Activity Objectives
ABC will monetize 3,000 MT of soybean oil and 5,000 MT of soybeans and use the generated
proceeds over a 3 year period to implement the following activities:
Increase production of livestock (goats)
Increase marketing and sales of livestock products (milk and meat) in urban areas
Develop a micro-finance network in rural areas
(b) Method of Choosing Beneficiaries
ABC will choose farm families in Agricola Province that meet the following criteria:
Have sufficient land available to raise livestock
Currently earn $500 or less per year (the official poverty indicator)
Express interest in raising livestock
Willing and able to spend time in training sessions regarding animal health
For the micro credit component, priority will be given to applicants that produce,
process, or market agricultural produce.
(c) Program Administration
Title Percent of Time Main Responsibilities
Country Director 25 Responsible for program oversight and direction,
monetization of commodity, and sales contract
negotiations
Monetization 100 Responsible for ensuring that the donated commodity is
Manager not sold below market value, finalizing the sale of the
commodity, and ensuring proper receipt and
disbursement of proceeds.
Project Manager 100 Responsible for day-to-day program management,
providing technical assistance in business planning and
management, and providing oversight of program
monitoring activities.
Finance Officer 100 Responsible for financial management and preparing
financial reports.
Logistics Officer 100 Responsible for monitoring port conditions and the
importation and discharge of commodity.
Bookkeeper 100 Responsible for assisting the Finance Officer in project
accounting.
(d) Activity Budgets
ABC has secured a commitment from the Government of Elbonia to provide public land that will
be used as a model livestock farm. ABC has also secured a commitment from Elbonia Aid, an
organization of Elbonians living abroad, to provide $10,000 to assist with purchasing livestock
for beneficiaries.
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(e) Recipient Agency
ABC will give a portion of the proceeds to Elboni-credit, a local credit cooperative in Elbonia, to
provide loans to qualified applicants under its Micro-credit program. Elboni-credit has three
years of experience in providing financial services to small agribusinesses and has received good
credit reviews from international credit firms. ABC will enter into an agreement with Elboni-
credit prior to signing its agreement with USDA.
(f) Governmental or Nongovernmental Entities
ABC will work directly with the following entities:
The Ministry of Agriculture
Provincial and local government authorities
Livestock vendors
Meat and milk processing facilities
Food markets in urban areas
(g) Method of Educating Consumers
ABC will publish notifications in local newspapers that highlight its programs in the country and
identify USDA as the donor of the soybeans and soybean oil. In activities conducted under this
agreement, ABC will notify participants that USDA provided funds for the program. In addition,
ABC will recognize USDA in all printed materials produced by the program with USDA
resources.
(h) Criteria for Measuring Progress
Activity Beneficiaries Intended Intended
Type # Direct Type # Output Outcome
Indirect
Increase Farmers/ 2,000 Family 10,000 - 3 goats - Goat
production Herders members distributed to population is
of each family tripled
livestock - Farmer income
- 20 Training increases by
sessions on 50%
improving - 75% of goat
animal health owners vaccinate
animals
- 50%
participation by
women
3
Increase Farmer 40 Farmer 2,000 - Provide - Sales of
marketing Cooperatives members HAACP domestically
and sales training to produced goat
of milk and slaughterhouse meat increases
meat staff and by 50 % in urban
management markets
- Provide 3 - Sales of goat
training milk increases
sessions to by 25% in urban
cooperatives markets
on safe
handling of
milk
- Provide
capital inputs
to increase
slaughterhouse
capacity
- Provide
capital inputs
to cooperatives
interested in
bulk marketing
their milk
Develop a Farmers and 2,000 Family 10,000 - Provide - 95% repayment
micro- Entrepreneurs Members 2,000 loans rate
finance averaging - Loan recipients
network in $100 each increase income
rural areas - Provide 2 by 50%
training - 75% of loan
sessions for recipients or
loan recipients women
in formulating
business plans
Total Direct Beneficiaries of the program: 4,000
Total Indirect Beneficiaries of the program: 20,000
Total Beneficiaries (direct and indirect) of the program: 24,000
Anticipated Monetization completion date (month and yr): Dec. 2011
Anticipated Project completion date (month and yr): Dec. 2014
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Monitoring and Evaluation –
At the beginning of project implementation, ABC will do a baseline survey of households in
Agricola Province. This survey will measure current food security, income levels, and number
of livestock currently owned by households. At the end of each year of implementation, ABC
will record the increase in number of animals and household income increases for the livestock
component, and will keep track of the total number of loans provided, the average size of each
loan, the percentage of loans to women, and the repayment rate. At the end of the program, ABC
will hire an independent consultant to do an evaluation of the program’s overall impact on
household food security and income.
Impact on Private Sector Development –
The program will promote private sector development in the livestock sector of Elbonia.
Participants will learn improved animal husbandry methods which will help them to increase
production and sell some of their animals, thereby moving them beyond subsistence agriculture
into the commercial market. By working with farmer cooperatives, dairy companies, and meat
processing facilities to improve hygiene and food safety, demand for meat and milk will increase
in urban areas.
The provision of micro-credit loans will also enhance private sector development, as the infusion
of capital will help to create, improve, and expand agribusinesses and food production activities.
6. Use of Funds or Goods and Services Generated
(a) Quantity and Type of Commodities
(No action needed – captured in sections 3 and 4.)
(b) Impact on Other Sales
Elbonia consumes 150,000 MT of soybeans annually. Elbonia produces 30,000 MT and imports
100,000 MT commercially each year. This leaves a gap of 20,000 MT. Elbonia imports
soybeans from the United States, Argentina, and Brazil. The proposed sale of 5,000 MT of
soybeans is small relative to overall demand will not affect local production, prices, or
marketing. Soybeans are ground into soybean meal which is used in the manufacture of poultry
feed. Premier Flour Mill, the largest flour mill in the country, recently started up a soybean
crushing facility. There are several smaller crushing facilities as well.
Elbonia produces approximately 10,000 MT of vegetable oil annually and has an annual need for
40,000 MT. The country imports 20,000 MT of soybean oil annually from several European
countries. The sale of 3,000 MT of soybean oil will help to meet total demand and will not have
a negative impact on local production or commercial imports.
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(c) Amount of Sale Proceeds Anticipated
Amount to be Estimated Sales
Commodity Estimated Proceeds
Sold (MT) Price Per MT
Soybeans 5,000 $300 $1,500,000
Soybean Oil 3,000 $800 $2,400,000
Anticipated Interest $100,000
TOTAL 8,000 $4,000,000
Barter or Food for Work Value
Commodity and Kind of Goods or Total Value of Goods or
Tonnage to be Bartered Services Expected Services Expected from
Quantity
or Used for Food for from the Barter/Food the Barter/Food for
Work for Work Work
(d) Private Sector Participation in the Sale of the Commodities
ABC will advertise the availability of the commodities in local newspapers and radio stations.
Buyers will need to submit written bids for the soybean oil and soybeans. ABC will review the
bids and select those bids with the highest prices, if the bids meet the requirements in ABC's
tenders. If the bids are below the pre-set floor price of ABC, a second bidding process will take
place. The private sector owns 90 percent of the vegetable oil distribution capacity and 95
percent of the soybean crushing capacity in Elbonia. The bidding process will be open to private
and public sector buyers.
(e) Use of Sales Proceeds
Expense Category Estimated Dollar Amount
of Monetization Proceeds
Direct Costs:
- ITSH $0
- Increase Livestock Production $1,000,000
- Increase Marketing and Sales of Milk and $1,000,000
Meat
- Develop Micro-Finance Network $800,000
- All Other Costs $800,000
Indirect Costs:
- Applied in accordance with the NICRA* $400,000
TOTAL DIRECT and INDIRECT COSTS $4,000,000
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*Must conform to any negotiated indirect cost recovery agreement with a U.S. government
agency.
Increase Livestock Production
ABC will provide “Training of Trainer” sessions to extension workers in improved animal
husbandry methods. This will include how to improve animal health and better feeding methods
to promote optimal weight and milk production. ABC will have a veterinarian on staff to assist
in these trainings. Once the extension workers are trained, they will hold training sessions with
farmer organizations in Agricola Province to teach them better animal husbandry methods. Once
the farmers are trained, ABC will provide 3 goats to households where at least one family
member has received the training. The extension workers will follow up with occasional visits to
these farmers to discuss issues they may encounter in raising the goats. It is estimated that
extension workers will visit these farmers at least once every 3 months during the first year, and
less often after that. In order to extend the benefits of this program to a wider community, the
recipients of the goats will be required to provide their first female offspring to another
community member, who will also be trained by the extension workers.
Increase Marketing and Sales of Milk and Meat
ABC will select several farmer cooperatives that are interested in bulk marketing of their goat
milk. Funding will be provided to purchase refrigerated milk tanks and a refrigerated milk truck
that can be shared among several cooperatives. ABC will provide training to these farmers in
food safety, marketing and sales. ABC will foster marketing links with the major supermarket in
urban areas, and will do radio advertisements promoting the health benefits of goat milk.
ABC will also work with the main slaughterhouse in the Cristobel, the largest city of the country,
which is near Agricola Province. ABC will provide funding to make physical improvements and
enlarge capacity. ABC will also provide training to management and staff on how to improve
hygiene and food safety using HAACP concepts.
Develop Micro-Finance Network
ABC will use $800,000 of the proceeds to provide micro-credit loans to roughly 2,000 people in
the Dry Valley of Elbonia. Loans will range from $50 to $1,000. Priority will be given to
women as they frequently suffer discrimination in obtaining credit from traditional sources. The
loans will be aimed at creating, improving or expanding agribusinesses or food production
activities. Each applicant must submit an application for credit to ABC’s loan office in order to
be considered for a loan. When an application is approved, ABC will notify the applicant of
approval. A common income-generating source for rural women is through home or bazaar-
based economic activities. Generally, women chosen to receive micro-credit loans often use the
money in support of agricultural production and food processing of their local crops. The money
is also sometimes used to support income-generating activities such as marketing their
handicrafts in bazaars, and selling various local food items, including fresh meat, bread, and soft
drinks at roadside kiosks.
7
The loans will be repaid after one year, and the interest rate on the loans will be 10 percent. Any
loan recipient who does not pay according to the terms will not be eligible for a future loan under
the program unless overruled by ABC due to circumstances beyond the loan recipient’s control.
(f) Procedures for Assuring Receipt and Deposit of Sale Proceeds
ABC expects to receive payment for the commodities from the buyer through an irrevocable
letter of credit. ABC will require that the letter of credit be confirmed to ABC prior to the export
of the commodity. ABC expects full payment for the commodities upon presentation to the buyer
of export documentation. ABC will deposit the proceeds into a separate interest bearing account
in Elbonia until needed. This account will be under the sole authority of ABC. The country
director will approve all disbursements from the account.
7. Distribution Methods
(a) Description of Transportation and Storage, (b) Description of Any Reprocessing or
Repackaging, and (c) Logistics Plan
ABC will nominate a freight agent in the U.S. to arrange for delivery of the commodities in
Elbonia. Elbonia has three ports. One port that may be used is the port of Emeraldi. The port of
Emeraldi receives regular shipments of packaged and bulk commodities and has adequate
facilities for receiving and berthing large vessels of both bulk and packaged commodities. It is
well equipped with three berths of which one is for bulk grains, and has a depth of 11 meters.
The port of Emeraldi also has a bonded warehouse and several silos for bulk grains with total
capacity of 100,000 tons. Two other storage sites exist within a 15-mile radius from the port,
and each site has 60,000 tons of storage capacity for packaged products. However, since ABC
has arranged with the buyer to have the cargo offloaded directly into railcars for the delivery to
the buyer’s warehouse or distribution center, no storage needs are expected. A representative of
ABC will be present at the port to receive the commodity and to witness the offloading.
Upon receipt of shipping documents, ABC will notify the buyer when the commodity is expected
to arrive at the port in Elbonia. ABC has made arrangements with the buyer for the commodity
to be offloaded into railcars for delivery to the buyer’s warehouse. ABC will not repackage the
commodities.
8. Duty Free Entry
The Government of Elbonia passed a law in 2005 that provides duty-free entry for all
commodities used for humanitarian purposes. However, the Government considers monetization
to be a commercial transaction and therefore subject to tax. ABC will provide in its sale contract
that the buyer(s) will be responsible for the payment of any duties or taxes imposed on the
commodities.
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9. Economic Impact
After years of war, the Elbonian economy is slowly recovering due to foreign aid and increasing
foreign investment. Recovery has been uneven, and in general the agriculture sector remains in a
precarious position due in large part to a lack of investment capital. Elbonia’s agricultural sector
is largely comprised of subsistence farmers heavily dependent on seasonal rains. The
Government of Elbonia has included food production and food security among their highest
priorities in their National Development Plan. According to the 2008 World In Figures
published by The Economist, Elbonia has a population of 10 million with a 2.74 percent average
annual growth rate and a crude birth rate of 39.4 (39.4 live births per 1,000 population from
(2000-2005) placing it 34th among the highest crude birth rates. Given these figures, Elbonia
requires additional commodity resources to ensure short-term food security while working
towards mid- and long-term economic and social goals. In addition, Elbonia’s poultry sector has
been growing, creating an increased need for soybean meal which is used in the manufacture of
feed. The largest flour mill has recently started up a soybean meal crushing facility, which will
help to meet demand. Local production of both soybeans and vegetable oil is limited and
commercial imports fall short of meeting total demand. Thus, the 5,000 MT of soybeans and
3,000 MT of soybean oil supplied through this Agreement are unlikely to have a significant
effect on the local market or production.
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