Pricing Strategy

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E. Pricing Strategy
FARMERS GRANARY
PRODUCT COSTING
Production cost per hectare for 110-120 days
Direct Expense

Urea Fertilizer

Php 6,300.00
Pesticide

2,4-D Amine Weed Killer
Php 500.00

Surekill Molluscicide Killer
Php 960.00

Php 1,740.00
Sacks
200 pieces
Php 2,600.00
Seeds (Hybrid)

Php 23,050.00
Total Direct Expense

Php 33,690.00
Indirect Expense

Fuel

Php 500.00
Irrigation

Php 1,200.00
Kuliglig or Two-wheeled Tractor
Rent
Php 3,000.00
Wage for 24 farmers

Php 250.00 per farmer in a day

Php 6,000.00
Total Indirect Expense

Php 10,700.00
Total Production Expense

Php 44,390.00
Add: Advertising

Php 14,000.00
Total Expenses

Php 58,390.00

*Advertising Format will be shown on the marketing budget summary. After 110-120 days farmers with a hectare farm can potentially harvest 195 sacks of rice which they can sell for P24.00 per kilo or P 1,584.00 per sack. Harvested Palay (195 sacks*Php1,584.00)

Php 308,880.00
Less: Total Expenses
Php 58,390.00
Potential Profit per hectare
Php 250,490.00

According to the Provincial Agriculturist Office (PAO), traders give the price and they compute this base on the production inputs of rice in Pangasinan. As of 2014, the table shown below is the entire price list of palay: January 2014

P19.00
February 2014
P21.36
March 2014
P22.37
April 2014
P22.56
May 2014
P22.94
June 2014
P23.61

The Provincial Agriculturist Office (PAO) also coordinates with Municipal Agriculturist about the appropriate pricing. According to the Provincial Agriculturist Office (PAO), the continuous increase of price is due to the continuous low supply of rice during the first 6 months of 2014.
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