Financial Viability and Profitability Analysis of Agricultural Technologies and Enterprises

Quick Facts:

  • July 2018 to December 2019
  • Philippines
  • Department of Agriculture – Bureau of Agricultural Research (DA-BAR)

The decision to adopt a new technology or engaged into a new enterprise depends on the feasibility of the proposed project in terms of its market, technical, organizational and management, environmental, financial, and economic aspects. One of the important questions potential technology adopters or investors seeks to answer is whether the financial benefits of technology adoption or enterprise start up exceed the financial costs of the project. Further, they want to know how much capital is required to implement the project and ultimately assess the project’s net benefits. The demand for the project’s output could be greater than the supply in the market and the project has been proven to increase yield. However, whether the project is financially viable is one critical dimension to consider. Financial analysis is, therefore, needed before researchers and extension workers can give their final recommendations on new agricultural production and processing technologies or enterprises to farmers, processors, and other potential investors.

On 30 January 2018, a Project Development Workshop between DA-BAR and SEARCA was held at the SEARCA Guest House. In the said workshop, Dr. Nicomedes P. Eleazar, DA-BAR Director, stressed the importance of financial viability and profitability analysis in DA-BAR projects because it is through such exercise that the institution learns and further evaluates which technologies and enterprises can be considered as financially profitable in the long run. It is also through this workshop in which, aside from the identified need to further provide training in conducting financial viability and profitability analysis to DA-BAR personnel and project partners (i.e., SUCs, RIARCs, RFOs), DA-BAR Technology Commercialization Division also discussed the need to update the financial viability manual of agricultural technologies and enterprises of selected agricultural commodities.

The objectives of this project are to:

  1. Prepare and publish monographs incorporating the financial viability analysis of technologies and enterprises of selected agricultural commodities; and
  2. Equip research personnel (national and regional) of various academic and research institutions as well as DA-BAR personnel with knowledge and skills in conducting financial viability and profitability analysis of new technologies and enterprises.