SOP Exhibits

Title:

Determination of Maximum Procurable Volume-FP

SOP Number : GM-PR12

ANNEX A

DETERMINATION OF MAXIMUM PROCURABLE VOLUME (MPV)
OF FARMERS/FARMERS GROUPS
---------------------------------------------------------------------------------------------

I. Total Production Area

Production area per farmer shall be the area (in hectares being utilized for the productin of the grains being procured. Total production area per Farmer's Group shall be the sum of the areas (in hectares) being utillized by all hte nonafide farmer-members of the FG for the production of the grain being procured. Only farmers who are either bonafide CLT Holders, Leaseholders, Lessors, Owner-Tiller, or Admninistrators shall be considered in the determination of the production area.

2. Average Yield

The average yield/hectare of the farmer shall be derived from the certification signed by the
BARC Chairman and APT submitted by the farmer.

The average yield/hectare of a FG shall be computed from declared average yield/ha/member in the masterlist submitted by the FG as certified correct by the APT.

Average Yield of FG (bags/ha.) = Total Average Yield/Hectare of
all FG Members
------------------------------------------
Total No. of Members

3. Marketable Surplus (MS)

The marketable surplus shall represent the maximum volume of the grain produce, in bags of 50 kg. that the farmer/FG may be able to sell after deducting his needs for food, feeds, seeds and wastage. Historically and based on figures from the Bureau of Ag. Economics, the marketable surplus for palay and corn is 64.5% and 66% of total production, respectively. Its computation shall be as follows:

Marketable Surplus (bags) = (Ave. yield (bags/ha)) x (Total Production Area (ha.)) x (% M.S.)

For lessors and leaseholders, the computation of the MS shall include the percentage production share.

4. Maximum Procurable Volume (MPV)

In determining the MPV of individual farmers, the factors to be considered are the marketable surplus, source of financing, source of water, and such other relevant information that the NFA Provincial Office may gather. Aside from these considerations, the MPV for FGs shall be determined as follows:

Example: Target Procurement Quantity from FGc under IPP = 35,000 bags

Marketable Share in
Surplus % Share of Target Procure-
Farmer's Group (bags) Total MS ment ( MPV)
--------------------- --------------- --------------- --------------------

FG1 10,000 20% 7,000
FG2 13,500 26% 9,100
FG3 15,000 30% 10,000
FG4 12,000 24% 8,400
______ _____ ______

TOTAL 50,000 100% 35,000

For FGI

10,000 bags
__________ x 100 == 20% of 35,000 bags = 7,000 bags
50,000 bags

For lessors and leaseholders, the MPV shall be determined as follows:

Total Production Area = 5 hectares
Average Yield/hectare = 70 cavans of palay
% Production Share = 70% for leaseholder
30% for lessor

Marketable Surplus = 70 bags/ha. x 5 ha. x 64.5% x 70%
of leaseholder = 158 BAGS

Marketable Surplus = 70 bags/ha. x 5 ha. x 64.5% x 30%
of lessor = 68 bags

In the determination of the MPV, deduct from the MS such obligations of the leaseholder/lessor like payment in kind for farm loans, and other payments in kind as may be reflected in the FIS and other documents.