ISO 9001:2015 CERTIFIED

PIG FARMING
AS AN ENTERPRISE
 ISO 9001:2015 CERTIFIED

INTRODUCTION TO ENTERPRENEURSHIP

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Introduction

This module entitled “Pig Farming as An Enterprise” contains the different parts:

- introduction to entrepreneurship
- making a business plan
- accessing the market for your products
- assessment of your farm as an enterprise – looking at the technical and financial
aspects
- managing your people
- accessing possible credit services and facilities

In this module, you will not only be looking at the

production and financial performance of your pig
farm but more importantly, you will learn how to
become a real entrepreneur.

How to become a real good entrepreneur is a big

question! And that is what we try to answer as
we go along!

But always remember that successful

entrepreneurs are not BORN, they are MADE!

As one successful entrepreneur said, “In

business, TIME is MONEY! The longer you wait,
the more you lose.

YOU have to be the FIRST!

YOU have to be FAST!
YOU have to be FOCUSED!

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What is Entrepreneurship?

• It is an activity or a process of planning, organizing and putting together all the

resources required to bring a new enterprise to existence and to run and manage
it on a long term basis - UP ISSI

Entrepreneurial skills are essential for the success of the farm business. Farms that
possess human resources with exceptional skills can have a long-term focus and are
more likely to use their skills to take advantage of emerging opportunities.

Entrepreneurship involves seeking and trying new ways to develop and improve
successful businesses.

Entrepreneurship involves focusing on innovating, assessing risks/rewards of a new

venture, searching for opportunities, and seeking new information.

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Rewards of Going into Business or Entrepreneurship

• Having unlimited opportunity

to make money.

When you have your own business, you

will most certainly have unlimited
potential to earn money. How much
money you earn depends on the time
and effort you put into your enterprise.
Successful entrepreneurs have earned
their wealth and prestige through hard
work and by having the right product for
the right market at the right time.

• Being your own boss.

As manager of your business, you make the decisions for your enterprise and take full
responsibility for these. The quality of these decisions will translate into either gain or loss for
your business. Being your own boss means you are in control of your future. You have a better
grasp of what you want to be.

• Tapping your creativity.

A business usually starts out as an idea. You will have the opportunity to harness this creativity
and turn your idea into products and processes.

• Overcoming challenges and finding fulfillment.

Starting a business is by itself an accomplishment. Running a business tests an entrepreneur’s

capability in securing and managing resources. How well a business turns out depends on the
owner’s ability to face challenges and overcome difficulties.

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 • Helping others.

In the process of running a business, an entrepreneur employs workers, and pays them
income which improves their lives. An entrepreneur who succeeds and grows also helps
suppliers, sub-contractors, dealers and other businesses connected to him succeed and grow
too.

• Building an entrepreneurial legacy.

A business can be a lasting legacy to the family. It can ensure employment for some members
of the family. It can create an enterprising culture than can be handed down through the
generations.

Risks of Going into Business or Entrepreneurship

• Possibility of failure.

There is always the possibility of

failure – a single wrong business
decision can bring a business to
bankruptcy.

• Unpredictable business
conditions.

A small business is vulnerable to

sudden changes in the business
environment. In a fast-paced
industry, a small firm may not have
the financial capability or the
organizational capacity to respond
adequately to new opportunities and
their related problems.

• Long hours of work

A prospective entrepreneur must be ready to spend most if not all his waking hours in the
business. Also, family time and personal affairs may be sacrificed.

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 • Unwanted or unexpected responsibilities.

The entrepreneur may eventually find himself saddled with management responsibilities he
did not bargain for.

Who is an Entrepreneur?

• An entrepreneur is one who creates wealth by owning and managing a business

profitably out of limited personal resources. An entrepreneur is not merely looking
at profits but for opportunities as well.

• An individual who establishes and manages a business for the principal purpose of
profit and growth; characterized principally by innovative behavior, and employs
strategic management practices in the business - ILO Publication

• Combining economic factors ( land, labor, capital, technology ) to initiate changes

in the production of goods and services - Wilken

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What Motivates a Person to Become Entrepreneur?

• Early childhood experience – even when they were still young, entrepreneurs are
exposed to hard work and are encouraged to achieve.

• Desire for independence – entrepreneurs often dislike being dependent on others

or not being free to do what they want to accomplish.

• Frustration with traditional careers – because of low career progress, inability to

make needed changes, low wages or office politics, entrepreneurs are typically not
happy working in a business organization which they do not own or control.

• Challenge and excitement of owning a business – the potential success of a

business enterprise drives entrepreneurs, making them enthusiastic and energetic
about what they do.

• Effective role models – made entrepreneurs usually have been influenced and
motivated by the example of another successful entrepreneur who is looked upon
as a hero or inspiration.

Tips on What a Beginning Entrepreneur Should Do to Succeed

• Create a clear picture of goals or what you want to accomplish

• Translate goals into realistic plans and practical steps

• Develop good relationship and network with successful entrepreneurs

• Take care of your business by attending trainings and seminars which will
enhance your skills, competencies and broaden your perspective

• Learn to innovate which will allow you to perform otherwise common or

ordinary tasks distinctively and differently

• Be alert in turning opportunities to marketable goods and services

• Balance family and business demands

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What are the Characteristics of an Entrepreneur?

§ Positive self-esteem
§ Positive self-confidence
§ Self-discipline
§ Independence
§ Forward Looking
§ Hardworking/industrious
§ Systematic
§ Resourceful
§ Open-minded
High value for work

What are the Entrepreneurial Skills that He Must Possess?

Personal
§ Innovative
§ Has initiative
§ Risk taker
§ Accepts challenges
§ Has the ability to deal with the unknown with ease
§ Responsible
§ Seeks opportunities
§ Positive thinker

Interpersonal
§ Interacting with others effectively
§ Communicating effectively
§ Negotiating
§ Influencing people
§ Demonstrating leadership

Process
§ Ability to plan and organize
§ Ability to analyze, synthesize and evaluate
§ Ability to execute the plan
§ Ability to make decisions

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Personal Entrepreneurial Competencies ( PECs )

An intensive research conducted in selected countries worldwide by the Management

Systems International ( MSI ) McBer Team has identified ten key personal
entrepreneurial characteristics that separate successful from unsuccessful ones.

Achievement Competencies

Opportunity seeking
• Sees and acts on new business opportunities.
• Seizes unusual opportunities to obtain financing, equipment, land,
workspace, assistance, etc.

Persistence
• Takes repeated or different actions to overcome an obstacle.
• Makes personal sacrifice or expends extraordinary efforts to complete a
job.
• Sticks with own judgment in the face of opposition or early lack of success.

Commitment to work contract

• Accepts full responsibility for problems in completing a job for customers.
• Pitches in workers, or their place to get the job done. Expresses a concern
for satisfying a customer.

Demand for quality and efficiency

• Acts to do something that meets or beats existing standards of excellence
or improve on past performance.
• Strives to do things better, faster and cheaper.

Risk taking
• Takes what he or she perceives to be moderate risks.
• States a preference for situations that involve moderate risks.

Planning Competence

Goal setting
• Objective in setting his goals which are attainable and measured through
verifiable indicators.
• Sets goals as guide to motivate himself in working it out.

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Information seeking
• Strives to gather effective and information helpful in carrying out his
endeavor.
• Attends trainings and seminars to improve his efficiency in managing his
enterprise.

Systematic planning and monitoring

• Plans carefully before engaging in his venture.
• Once established, monitors the progress and evaluate the efficiency of
his enterprise to make adjustments needed.
Persuading and networking
• Uses deliberate strategies to influence or persuade others.
• Uses business and personal contacts to accomplish own objectives.

Self-confidence
• Has long belief in self and own abilities.
• Expresses confidence in own ability to complete a difficult tasks or meet a
challenge.

In this module, the concepts that will be presented and discussed are more of analysis
and making decisions. As we go along with some workshops, the participant will think
as an entrepreneur and what to do with the results afterwards.

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STARTING A SMALL PIG ENTERPRISE

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The Business Plan

How to start a project, enterprise or business is not that

easy!!

Going into venture like pig keeping requires a lot of time

and effort. Once you have put yourself into this kind of
enterprise, you will not only learn the technical aspects
of raising a pig but another important aspect that you
must consider are the marketing and financial aspects.

The investment required in putting up or expanding a

pig farm depends on a lot of factors: the size of the farm, the type of operation, input and
output markets, extension and credit services among others.

However, making a business plan before putting up your project is another important thing to
consider. After you have made the preliminary assessment of yourself, the environment and
other factors, you can start preparing a business plan. You should write your business plan
according to the specific factors and conditions of your enterprise, your pig farm!

What is a Business Plan?

A business plan is a useful management tool that can be used to

document purpose of the project and its activities. It describes
the activities to be executed, how products will be produced and
marketed, and how the financing will be undertaken.

A business plan is prepared because it improves the chances that

the business will succeed. Few people will attempt to build a new
building without first preparing detailed plans.

Businesses need more than money and dreams to keep them alive
and profitable, they need careful planning! It is a means of
discovering the problems and pitfalls which might be encountered
before they happen, so that the farmer will be able to make the
right move to avoid them.

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A good business plan puts a lot of valuable information at the fingertips of the farmer, ready
to make tough decisions and manage changes in his operations. A written plan will also
enable the farmer in a better position to explain his goals, where the farm is going, what
needs to be done and many more. It provides a means to check and compare the progress
of the project with the expected goals and to make adjustments when necessary.

The business plan has three main components: the marketing plan, the technical and
organizational plan, and the financial plan.

Getting Started: Assessing the Business Idea!

Since careful planning is critical to the success of any venture, it is important to go through
the process to examine every aspect carefully and objectively.

Some questions that should be asked:

1. What is the purpose of the project/business/

enterprise?
2. What is the intended product?
3. Where will the farm be put up? Is it feasible to
have an expansion?
4. Are resources available and facilities accessible?
5. What are the resources needed?
6. What is the specific market?
7. How much is needed to start the business?
8. Are there existing extension services in the area?

These are only a few of the questions that will be answered while preparing the business plan.

The following guidelines may help you in writing your business plan:

A. Introduction:

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1. State your objectives

This section, which precedes all business plans, tells your reader who you are, what
your business goals are, and when you expect these goals to be accomplished. If your
business has a track record of say, three years, then you can approach a bank and
indicate how much you want to borrow and what you plan to do with the funds.

2. Describe the business/enterprise

This section gives a background information on your business and how it is currently
doing.

For a new business - Instead of a brief history, explain what the business will be, how
the idea for your business was conceived, and how the business is expected to
develop.

For an existing business - Provide the following information: business name, date and
place of registration, date when operations began, brief history of the business, names
of owners, partners or major investors.

MAIN PARTS

I. THE MARKETING PLAN

The final activity for fattening pigs is marketing, a vital

segment of the swine industry. It is essential for the pig
raiser to identify the right market outlet and more
importantly, the price he should receive for his products. He
should be acquainted with up-to-date market trends and
information on prevailing prices.

Marketing your product is very important in a business.

Even if you have the best pigs in town if the marketing
aspect is not favorable, then your pig keeping enterprise
would likely become a failure.

Try to explore all the possibilities on how and what is the

best way to market your pigs. Hence, a sound marketing plan is needed in your pig business.

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1. Describe your products or services

Give a detailed description of your products or services to give the reader a clear idea
of what you are selling. Will you be selling weaners, fatteners, fresh meat, boar semen,
etc?

2. Identify your potential

market

Determine who are your present or

projected customers and how many.
Be as specific as possible. To whom
will you be selling your products?
Retailers, butchers, cooperatives?

3. Identify your competitors

Competition need not be a threat. Rather it should spur you to do your best. Learn as
much as you can about your competitors.

4. Consider your pricing policy

In pricing your goods and services, all relevant factors should be considered, like cost
of production and distribution and the degree of acceptance by the market. Another
factor to account for is the pricing structure of your competitors. Of course, the aim of
your pricing policy should be to set the price at a level that maximizes profit in the
long run.

5. Determine your marketing methods

Selling a good product at a reasonable price is not enough. Your business plan must
answer the following questions:

a. How will you promote or advertise your business?

b. How will you sell your product? Will you engage marketing agents/middlemen?

c. What channels of distribution will you use to reach your customers?

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II. THE TECHNICAL (PRODUCTION) AND ORGANIZATIONAL PLAN

1. Identify your material requirements and sources of supply.

List down what materials and stocks you will need and where you will get them.

Make a table of requirements and suppliers. It would be helpful if you have a list of
target suppliers of feeds, breeder stocks for comparison purposes. It will also be
worthwhile if you get some information about these suppliers in terms of quality of
their products and services.

2. Determine the process and equipment you will use

Give a detailed explanation of your production process.

For example, try to calculate how many pigs can be sold per month per year, at what
weight? Set your farm targets for these will guide you as you go on with your pig
production business.

3. Determine your key personnel

Identify the key people in your business, including you as owner and manager.

4. Identify your work force and support personnel

List down the skills and positions you need, the number of people for each position,
and their corresponding salaries and wages.

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 5. Describe the duties and
responsibilites

Make a brief description of what each

worker will do in the farm to maximize
their potentials.

Consider what special skills they

possess, experiences that they have and
how much do they know about pig
production.

III. THE FINANCIAL PLAN

1. Determine your financial requirements

Prepare a forecast that outlines all your

capital requirements. There are three:
fixed capital, working capital, and pre-
operating capital.

Fixed capital includes cost of land and

building, or lease deposits on them; cost
of improving the land or renovating the
building; machinery and equipment;
These are usually one-time expenses,
and will generally last the lifetime of the
business.

Working capital is the reserve money you need to run the business until it becomes
self supporting. This may take from one to six months or even longer. You need
working capital to purchase your raw materials, compensate your workers, and pay
for transportation, telephone, electricity and water bills.

Pre-operating capital includes money you spend to register your business. This is
money that you spend before your business begins to operate.

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 Be sure that no significant item is overlooked. Be realistic and do not underestimate
your requirements. Provide for contingencies and a margin

of safety to avoid cost overruns later.

At this point, you are ready to implement your plan. It is time to raise

funds, register your business, find a suitable location, purchase equipment and
supplies, hire and train people, and start operating.

Don’t let that good idea sleep in your head!

Start and get moving!

2. The Financial Statements

2.1 Income Statement

The income statement presents the annual costs incurred in the enterprise and
how much income it earns on the same period. For existing businesses, it will be
worthwhile to show 1 or 2 year financial performance of the farm.

2.2 Cash Flow

The cash flow summarizes the amount of money coming in and going out from
the business. Cash flow forecasts will make it possible to decide what and when
it can be afforded and how the farm will maintain its operation based on the cash
available.

2.3 Balance Sheet

The balance sheet describes the assets, the liabilities, and the equity of the
livestock farm at a specific time. The balance sheet indicates what the farmer
owns and what he owes to others.

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PHASES IN BUSINESS START-UP PROCESS (From Inception to Operation)

Phase 1: Exploratory Phase

This is to look into business opportunities, to determine the interest and

commitment to continue with the process in putting up the business. This is also the
phase where you look for potential investors, customers, suppliers, etc.

Phase 2: Feasibility Phase

This involves the exploration of ways to evaluate the business idea to see if
the idea is sound. Tasks include determining capital requirements, soliciting
indications of interest from grants/lending institutions, locating and reviewing
data/information sources like consultants, advisors, prospective customers, and other
sources of specific information.

Phase 3: Planning Phase

Everything in mind is put into paper.

Phase 4: Implementation and Operation

In this phase, what has been written in the business plan will be implemented
or put into practice. But only those accepted /approved business plan will be
implemented. Relationships with customers and suppliers have to be established.
Salaries of workers have to be employed. Reports have to be prepared. Revisions
/adjustments are made when necessary.

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PARTS OF A BUSINESS PLAN

A business plan is actually a compilation of several sub-plans. A complete business plan

includes:

I. Title Page and Table of Contents

II. Executive Summary and Business Profile
III. Marketing Plan
IV. Technical/Production Plan
V. Organizational Plan
VI. Financial Plan

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GETTING THE RIGHT MARKET

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As an entrepreneur, it is not enough to know how to grow pigs but it is also important to know
how your pigs can be marketed to bring them to the right place and getting the right price.
Where to market, when to market and how to market are important economic decisions
because receiving top value for your product makes a difference in terms of profit.

In getting a good return, the pig farmer must consider the number of pigs sold, the weight
and uniformity when to sell the pigs. In some areas in the Philippines, oversized finishers
(100 kg and above) are not commanding a good price, and this gives the farmer a lower
return in the end considering that he has spent more feeds. In this case, the entrepreneur
must know when to sell his finishers and must look for a market as soon as the finishers are
ready for slaughter.

It is essential for the pig

raiser or farm manager to
identify the right market
outlet and more
importantly, the price he
should receive for his
products. He should be
acquainted with up-to-
date market trends and
information on prevailing
prices.

A sensible entrepreneur is always on the look-out for more profitable ways of marketing or
adding value to the existing product or look for buyers or customers who would pay more for
better terms. Any new opportunities must be considered and evaluated in relation to internal
business capability, external constraints that may limit this capability and the requirements,
which are set by the consumers.

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The Marketing Mix

The marketing mix is generally accepted as the use and specification of the 4 Ps describing
the strategic position of a product in the marketplace.

The producer/firm/farmer tries to generate a positive response from the target market by
blending these four marketing mix variables in a favorable manner.

These 4Ps are:

• Product
• Price
• Place
• Promotion

Product

The product is the physical product or service offered to the consumer. In the pig
business, the product that comes from the hands of the producer is the live pig. But
the final form when it reaches the consumer is the carcass or fresh meat, or even
further, the processed meat. Whatever it maybe, the product should be desirable and
satisfies the criteria (quality, quantity, specifications, etc) of the buyer.

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 Price

The price is the amount that a customer pays for a product. Setting a fair price of the
product is very important for the sustainability of the business. There are factors that
affect the price set for a product like competition, material cost, product identity, and
the perceived value by the customer. The producer/owner may decrease or increase
the price of the product if other businesses have the same product.

In the case of pigs, the price is set depending on the supply of pigs in the area. In
other cases, the middlemen called viajeros normally set the price of the liveweight
pigs.

Place

Place represents the location where a product can be bought. It is often called the
distribution channel.

In marketing of pigs, the live pig passes through different channels before the final
product (pork) reaches the consumer. The fresh meat/pork are usually displayed in
the wet market, supermarkets and meat shops.

Promotion

Promotion represents all the communications that a marketer may use in the market
place.

Promotion has four distinct elements – advertising, public relations, word of mouth
and point of sale. Advertising covers any communication that is paid for, from
television and cinema commercials, radio and internet, print media and billboards.
Public relations are where the communication is not directly paid for and includes press
releases, sponsorship deals, exhibits, conferences, seminars or trade fairs. Word of
mouth is any informal communication about a product by ordinary individuals, satisfied
customers or people specifically engaged to create word of mouth momentum.

Optimizing the market mix is the primary responsibility of marketing. By offering the product
with the right combination of the four Ps, marketers can improve their results and marketing
effectiveness.

Marketing Information

A basic recording system for marketing information is essential:

a. Exactly which product characteristics are needed? (Think of your pigs – are they
oversize?, castrated?, what is the backfat?, dressed? Live?)
b. In which outlets (viajeros?, butchers, retailers,
c. When (consider the season when many pig farmers are selling their pigs, why)
d. In what volumes (per head? In groups?, dressed or live?)
e. At what price (what is the prevailing liveweight price?)

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f. What promotion is required?
g. Can this be delivered at an acceptable profit?
h. Will you get the same price when your pigs are picked up?

Implications of Marketing

1. Who are our existing/potential customers?

2. What are their current/future needs?
3. How can we satisfy these needs?
• Can we offer a product/service that our customers would value?
• Can we communicate with our customers?
• Can we deliver a competitive product/service?

4. Why should customers buy from us?

Marketing Management Process

1. Analysis/Audit – where we are now?

2. Objectives – where do we want to be?
3. Strategies – which way is best?
4. Tactics – how do we get there?
5. Control – are we on the right track?

Why is marketing planning necessary?

1. systematic futuristic thinking

2. better coordination of efforts among members
3. development of performance standards for control
4. sharpening of objectives and policies
5. getting prepared for sudden changes

Marketing Strategy for Small Pig Farmers

Group marketing is one way in which small farmers can improve their marketing power or skills.
They can organize themselves into an association or cooperatives and work together to market
their produce. Working together will give them an advantage over single farmers because they
will have a stronger negotiation or bargaining power.

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The objectives of Group Marketing are:

a. To increase selling price

b. To stabilize producer prices or revenue
c. To provide product branding
d. To create or maintain a stable market for finisher pigs
e. To add value to products (slaughtering, packing, processed)

Piggies for sale!!!

Got the best piggies in town, for sure you’ll love them!

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ASSESSING YOUR PIG FARM AS AN ENTERPRISE

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 As an entrepreneur, you must
know how well your farm is
operating. It is helpful if you go
around the farm as often as
possible to know the condition
of your pigs and to check how
they are performing. You must
have a good knowledge on the
technical aspects so that you
can make the necessary
adjustments and decisions later
on.

Technical Parameters

As an entrepreneur, you must have an open and critical mind in dealing with different
problems in the farm. You must carefully assess the technical parameters and analyze them
so that you can make your decisions.

A sow herd’s performance is influenced by a wide range of factors; some of these factors can
be influenced by management decisions while others are beyond his control. The analysis
tree is a method by which one is able to identify and analyze the weak points in the production
results.

A wide range of external factors have various impacts on the technical output. Some of these
factors can be controlled and manipulated:

Management regular feeding, heat detection, moment of service or

frequency, proper planning of culling and acquisition of
replacement stock, age distribution of the herd.

Housing ventilation, design, equipment, pen/group size, all in-all out

system, manure disposal

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 Health general health control, vaccination program, mange treatment,
general hygiene, biosecurity measures

Feeding System water quality and quantity, dry/wet feeding, schedule, quality of
feeds, changing of feeds

Genetics quality, choice of breed, cross breeding

Other factors are beyond the control of the farmer and are therefore not included here, but
they can also have a considerable impact on the performance of a sow herd.

Factors such as:

§ Seasonal and/or periodical weather conditions

§ Administrative measures and government policies
§ Demand and supply situation
§ Market prices of feed ingredients, replacement stock and other input items
§ Infrastructure facilities

However, the analysis of these

factors should be combined with
proper recording in the farm. It is
not easy to make calculations and
analysis if records are not well
implemented or carried out. Once a
farmer is used to keep his records, it
would be easier to analyze the
technical results and make
improvements. Of course, improving
technical figures is one thing, but what
counts most is that the financial returns
should be improved too!!! Better
technical figures DO NOT
automatically give higher profits.

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Here is one way of analyzing your farm:

Factors That Influence the Number of

Piglets Reared Per Sow Per Year
Care/Feeding
Age
Heat Season
Occurrence Housing/Climate
Hormone Injection
Length of Lactation
Age of
Weaning
Timing of Insemination
% Pregnant Quality of Semen
Abnormality of Sows
Litter Season
Index Abortion

Mortality

Sow Culled Disease

During Accidents
Pregnancy Leg Faults
Piglets
Reared Breed
Per Sow Culling
Per Year Lost Control
Days Housing
Management

Housing
Age
Number Born Season
Cross Breeding
2 x Breeding

Diseases
Number of Housing
Weaned Stillborn Age
Piglets Care/Feeding

Housing
Litter Size
Number of Diseases
Dead Piglets Abnormalities
Age

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FARM TECHNICAL PERFORMANCE

In order to judge the results of a farm, TARGETS should be set. Generally, these
targets depend on the following factors:

1. the breed of the pig

2. quality of the feeds

3. availability of the feeds

4. health condition of the animals

5. management (attitude, skill, ability)

6. housing facilities

7. climate, weather

8. availability of extension and veterinary services

As conditions will vary considerably in different regions and countries, it is very difficult to

give general targets. It is therefore important to have at least some reference or insight on

the actual production performance common in the area.

Table 2. Judgment of Technical Figures in the Philippines

Standard Figure Bad Average Good

Litter index <1.9 2.0 >2.1

Average litter size <9.0 10.0 >11.0

Stillborn piglets/litter >2.0 1.0

Mortality rate >10.0% 10.0% <10.0%

Reared piglets/sow/year 16.0 18.0 21.0

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 Lost days/sow/year >30.0 25 <20.0

Average Daily Gain (15-85 kg) <600 g 600 g > 600 g

Feed Conversion Ratio >3.5 3.0 < 3.0

Mortality Rate (15-85 kg) > 5% 3% <3%

Rounds per year < 2.4 2.5 > 2.5

These targets are for crossbred pigs kept in the commercial farms. The breeds are either or
combinations of Landrace, Large White, Duroc.

SWINE PRODUCTION PERFORMANCE IN THE PHILIPPINES

In November 1, 1991, the Philippine Swine Industry Research and Development Foundation,
Inc. and the National Swine Commodity R&D Team of the Livestock Research Division of the
PCARRD-DOST started an action project which aims to monitor and evaluate the productive
and reproductive performance of locally raised pigs and establish a set of production
parameters. The project also aims to encourage local pig producers to adopt and maintain a
sound recording system and adopt continuous national pig production monitoring and
evaluation system in the country.

Presented on the following page is a summary of the 2009 report on the evaluation of the
swine production performance in the Philippines participated in by twenty-three
commercial farms from Luzon, Visayas and Mindanao. These commercial farms have a
stable sow population of not less than 50.

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Productive and Reproductive Performance of Swine Farms, Philippines, 2009.

TOTAL/
PARAMETER LOW HIGH AVE TARGET

Litter size at birth Alive 6.61 10.70 9.36 9.50

Mummified 0.03 0.99 0.26 0.20

Stillborn 0.12 2.59 0.52 0.30

Total 6.78 12.09 10.13 10.00

Average birth weight, kg 1.27 2.41 1.52 1.50

Litter size at weaning 6.22 10.14 8.48 8.55

Pre-weaning mortality, % 1.35 34.84 10.02 10.00

Weaning age, days 21.00 38.26 28.83 30.00

Average weaning weight, kg 6.19 9.28 7.41 8.50

Adjusted 30-day weight, kg 6.37 9.61 7.74 8.50

Weaning to Conception
Interval, days 4.13 39.72 15.19 11.00

Gestation period, days 113.49 119.20 114.73 114.00

Farrowing interval, days 156.02 215.51 176.76 165.00

Farrowing rate, % 52.76 89.00 72.01 80.00

Farrowing index 1.77 2.47 2.11 2.20

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PWSY 11.40 21.77 17.66 19.20

Average Daily Gain from birth, kg 0.250 0.596 0.528 0.545

Adjusted farm efficiency 1.76 5.18 3.30 3.50

PPSY 10.48 20.85 16.37 18.50

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MANAGING YOUR PEOPLE

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People who start their own enterprise have
control over what they do in their working life.
By managing the business, they have the
opportunity to shape their work environment
and make an impact on their community.
Resistance often comes when a new business is
introduced therefore one needs management
skills to make the business successful as well as
to convince the community that it can only help
them, or at least can do them no harm. This can
be made possible by operating in an
environment-friendly manner through an
efficient management system. Complaints from
waste disposal are often the concern need to be
addressed once a pig farm becomes operational.

Key Qualities of a Good Manager

• Reliability
• Integrity ( financial and ethical )
• Ability to lead
• Ability to set a goal and work towards it in small steps
• Eagerness to meet limitations

A good manager is a planner, a person who has vision, sets goals for achieving that vision
and ensures that the necessary resources, financial and human, are obtained and allocated in
time.

Functions of the Farm Manager

Farm managers are employed to oversee the over-all operation of the farm. His major
responsibility is to maximize returns out of the existing stock and other production inputs.
Usually, his job is to manage the day-to-day activities in the farm.

However, farm managers need to know the traditional management functions for them to see
the business operations with more clarity and understanding.

The Functions of the Farm Manager

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According to the traditional view of management, as expressed by Koontz and O’ Donnell,

managers perform the following five essential functions:

v Planning
v Organizing/Staffing
v Directing
v Controlling

Each function is as important as the next. Leaving any of these key functions out of the
management process could be detrimental to the organization.

Planning

Planning is considered as the most basic of all the managerial functions. It involves the
choice of the objectives to be pursued, the means to achieve them, and allocating the
resources of the organization. Specifically, it includes:

a. Defining roles and missions. Planning is required to determine the nature and scope
of farm work to be performed. The efficiency of a plan is evaluated by the amount it
contributes to business purpose and objectives as offset by the expenses and other
things required for its formulation and implementation.

Example: To increase farm productivity by 100%

b. Setting objectives. Generally, this involves the identification of goals for individuals,
groups and the entire organization. Thus, subordinates and superiors can jointly
determine and agree upon the results they seek to achieve along with the standards
that will be used to measure the results.

Example: To increase litter index to 2.1

c. Programming/Scheduling. This involves the formulation of a plan of action and time

requirements for each activity/program to reach the objectives. Market trends, i.e.,
price trends are taken into consideration during the formulation. The output is used
to:

ü make decisions for the allocation of limited resources to reach a particular objective
such as least cost, highest margin and so on.
ü help the farm manager focus on identifying critical areas and correcting them for
the successful completion of a project.

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 Example: Management practices to increase litter index; scheduling farm activities

d. Budgeting. It helps the manager in determining and assigning the resources required
to reach objectives. It provides a quantitative basis for decision-making and control.

e. Policy-making. It is a tool in establishing farm rules, regulations or predetermined

decisions. Policies are basic guidelines for actions. They indicate what is permitted and
what is not permitted. Promoting people from within the farm can be a personnel
policy of the company.

Example: Rules on farm biosecurity

f. Establishing procedures. It is the identification of consistent and systematic methods

of handling farm work. Farm procedures are instructions as to how a particular thing
should be done.

Example: A set of procedures in operating a farm machine or handling farm employee

grievances.

Organizing/Staffing

Organizing/Staffing is like a bridge connecting the planning function to the

accomplishment of reality. It involves identifying, subdividing, grouping and
coordinating the various activities required to achieve the objectives of the farm.

At the same time, the manager determines the manpower requirements and ensures
the availability of personnel to perform the work. It is also the process of recruiting,
selecting, and development of “right men” and assigning them on the “right jobs”.

Example: managing farm group meetings

Organizing is concerned with:

a. Structuring. The specific farm activities needed to achieve a set of defined farm
goals and objectives are determined. Then, the different farm activities are
grouped into a logical pattern or into common areas so as to avoid duplication
or conflicts and ensure smooth flow of work.

b. Integrating. The farm activities are assigned to specific persons, departments, or

groups. Then, the conditions for effective teamwork among organizational units are
established.

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On the other hand, staffing is divided into three major parts which are as follows:

a. Human Resource Planning. In order for the staffing function to be effective, it has to
be supported by certain analytical studies, and guided by a set of policies, procedures,
regulations, and standards. It involves human resource forecasting, job analysis and
human resource policies and programs formulation.

b. Execution. The human resource plan can only be useful if it is carried out in the actual
operation of the company. The implementation or administration of all policies and
programs directly related to acquisition and development of personnel will be the focus
of execution. Included here are recruitment, selection, placement, training and
development.

c. Maintenance. It involves activities that serve as mechanisms to help sustain the overall
staffing efforts by providing the farm manager with a continuous supply of information
gathered from the execution activities. Thus, human resource accounting,
performance evaluation, human resource information and program evaluation are
included in this phase.

Directing

Directing is the process through which a farm manager communicates with and influences
other members of the organization in the pursuit of company objectives. It is the human,
people-to-people aspect of managing which uses the farm manager’s interpersonal and
relational skills.

Directing involves the following:

a. Assigning. The individual farm workers are given their job responsibilities or specific
tasks to be performed.

b. Motivating. The farm manager influences the farm staff to perform in a desired
manner.

c. Communicating. Through communication, the farm manager achieves effective flow

of ideas and information in all desired directions.

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d. Coordinating. The farm manager and his subordinates work hand in hand in achieving
harmony of group effort towards the accomplishment of individual and group
objectives.
Controlling

This is the function of monitoring performance and undertaking corrective actions to ensure
the attainment of the organization’s predetermined goals and objectives.

The control process involves three basic activities such as:

a. Establishment of Standards. It is the process by which criteria or benchmarks are set

where actual performance can be measured. When a formal control system is in place,
the most common tool used by the farm manager as a benchmark is the budget. Thus,
in the preparation of the operating budget, it is necessary for the company to develop
standards for manpower needs, material requirements and other operating expenses
for the target levels of farm sales and production.

b. Analysis of Performance. The established standards should be used to measure

performance if the control system is to influence people to change their behavior.
When comparing actual performance with standards, reports should be prepared to
enable the farm manager to determine if the units are performing satisfactorily or not.
These reports are based on financial and non-financial data.

c. Correction of Deviation. Analysis of performance lead to remedial actions when actual

performance of the farm manager, or his units, is not in accordance with the planned
performance. This activity could feed back to the first step of the control process,
e.g., the establishment of new farm standards. This is why the control process is
considered as a recurring cycle of activities.

Role of the Farm Manager

The farm manager performs certain roles that help him be better at his job and also contribute
to the success of the business. As espoused by the contemporary view, the job of the farm
manager is classified in terms of the types of roles which he perform in the organization.
Henry Mintzberg lists these roles as follows: 1) Interpersonal roles, 2) Informational roles, and
3) Decisional roles.

Interpersonal Roles. This classification is subdivided into three types:

a. The Figurehead Role – role assumed by the farm manager when he represents his
unit in ceremonial and civic activities outside the organization.

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b. Leadership Role – role played by the farm manager when he initiates and
coordinates activities in his assigned units.

c. Liaison Role – is performed by the farm manager when he interacts with other
persons in the other units within and outside the organization.

Informational Roles. This is divided into the following subtypes:

a. Monitor Role – is done by the farm manager when he monitors the activities
occurring outside his office.

b. Disseminator Role – key role that the farm manager plays in transmitting and
disseminating information to other parts of the organization.

c. Spokesperson Role – is the role that requires the farm manager to represent and
speak for his units vis-à-vis other units of the organization and outsiders.

Decisional Roles. This consists of the following four types:

a. Entrepreneurial Role – the farm manager plays a key role in the identification of
new opportunities and the development of these into new products, services, methods
or activities within their organizations.

b. Problem Solver – the farm manager identifies solutions and takes actions to
overcome the continuous stream of problems that crop up in the day-to-day operation
of the farm.

c. Resource Allocator – The farm manager exercises a key role in the distribution of
funds, personnel, materials and other organizational resources among competing uses
in the organization.

d. Negotiator – The farm manager is involved in negotiation activities with people both
within and outside the organization (e.g. suppliers, customers, unions, government,
etc.).

The Skills of a Farm Manager

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The farm manager performs various functions and roles in the organization. Thus, he
needs equally varied capabilities and skills for the performance of such. The skills
required of the farm manager are classified into three types: 1) Interpersonal Skills,
2) Technical Skills, and 3) Conceptual Skills.

a. Interpersonal Skills - The farm manager should be skilled in human relations

because directing the activities of his staff is the central aspect of the farm manager’s
job.

b. Technical Skills – The farm manager needs the tools and skills relevant to farm
production.

c. Conceptual Skills – The farm manager needs the ability to abstract from the concrete
to be able to picture the whole organization to which the smaller units belong, and the
many different ways in which the subsystems are or could be related to each other.

The Organizational Structure

How will the business be managed and operated?

For the enterprise to operate smoothly and efficiently, there must be some structure of
authority and responsibility (chain of command), division of labor (job distribution), and
definition of what each one must do in the farm (job description). Therefore, there must be
an organizational structure.

In designing the organizational structure, it is important that the various functions of the
enterprise (marketing, production, organization and management and finance) be performed.
In a small enterprise, one person can handle several functions. For instance, the entrepreneur
may double up as general manager as well as production manager.

In small piggeries, it is also common to have family members hold responsibility in the
business or even perform production work. For instance, the wife may be the treasurer and
marketing manager, while the oldest child help out as a part-time production worker.

42
ASSESSING THE FINANCIAL STATUS OF YOUR PIG FARM

Is your farm getting a reasonable profit? If yes, how much? If no, how come? What tools do
you use to determine the financial status of your farm?

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In this chapter, you will learn how to make financial analysis of your farm. This will further help
you make decisions on what improvements can be made to get a better financial result or even
better, to make expansion later on.

For individuals who want to venture in pig keeping later on, you will still find this useful in your
enterprise.

Always remember that the most

important aim of an entrepreneur is to
earn profit. To realize this, the level of
production must be maximized through
good management and proper
combination of resources. This
means being productive and efficient!

As an entrepreneur, you must also know how to account all the costs involved in the production
process to be able to determine how much was gained or lost from your enterprise. In most
cases, however, you overlook your self-owned resources (own labor, family labor, own produced
crops fed to his animals) which really result to a large profit without considering your own
resource invested in the production. These self-owned resources like own labor should be
included in the calculation of farm income to have a more concrete basis of decisions and other
farm activities.

For our sample exercises, we will try to work our some financial analysis

This part presents two different operations in pig production:

1) Farrow-Finish Operation. A farmer keeps a number of sows, produces piglets and

rears the piglets till finishing stage. Finishers are produced and sold when they reach
the market weight of 80-90 kg LW.

2) Finisher production. A farmer buys weaners from other farms and produces finishing
pigs. These finishing pigs are sold when they reach the market weight of 80-90 kg
LW.

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As we go along, we will focus on two important points: 1) the COST to establish a pig farm and
2) the RETURN from the investment made. It is important to identify the inputs and the costs
involved in pig production and how efficient these resources are used in the production process.

Hopefully, you will be able to apply the economic tool used in this module and would help
you calculate and analyze the cost of production, sales and return for a specific production
period.

COST AND RETURN ANALYSIS

The cost and return analysis is the most common method of determining the profitability of
any enterprise. It summarizes and reports financial statements regarding costs and returns in
a pig farm. The computations here are based on the normal year of operation.

In determining the acceptability of a new technology, the cost of production and investment
should be considered aside from the income. Whether the farmer can afford or he is willing
to invest in a given technology, is a major consideration. Thus, cost and return analysis is
needed in farm decision-making.

Net Income

Net income is the profit from the year’s operation and represents the return to the owner for
personal labor, management and equity, which are well used and applied in the pig farm.

Net Income = Total income/year - total costs/year

Return on Investment (ROI)

Return on investment is a measure of profitability relative to the capital invested in the

business. This is a ratio which is obtained by dividing the net income by the investment.

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 Net Income

Return on Investment = ---------------- x 100

Investment

Payback Period is the number of years that the investment is fully recovered. This is obtained
by using this formula:

100

Payback Period = --------------

ROI

In the following cost and return analysis, you will see the different ROIs and returns depending
on the type of operation.

References:

“Do You Want to Go Into Business?”, Department of Trade and Industry, Philippines

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Module on Pig Keeping as an Enterprise Manual, PTC+ Barneveld, The Netherlands

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ISO 9001:2015 CERTIFIED

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