Maharishi University of Management

Sustainable Green Fund (SGF)

Marketing Plan

TABLE OF CONTENTS I. EXECUTIVE SUMMARY A. INTRODUCTION B. WHAT IS ORGANIC FARMING C. VISION D. MISSION E. SCOPE II. ASSESSMENT OF CURRENT SITUATION A. KEY FACTS ABOUT CAMBODIA B. MARKETING ENVIRONMENT 1. COMPETITORS 2. ECONOMIC SITUATION 3. SOCIO CULTURAL SITUATION 4. POLITICAL SITUATION 5. LEGAL SITUATION 6. TECHNOLOGICAL SITUATION C. TARGET MARKET D. SWOT ANALYSIS 1. STRENTH 2. WEAKNESS 3. OPPORTUNITIES 4. THREATS 5. SUMMARY III. MARKETING MIX A. PRODUCT B. PRICE C. PROMOTION D. PLACE IV. STRATEGIC PLAN A. STRATEGIES 1. FINANCING 2. TECHNICAL V. APPENDIX VI. SCI POINT VII. REFERENCES

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I.

EXECUTIVE SUMMARY

A. INTRODUCTION SGF believes in fair dealing and equal right. Small households in developing countries usually face difficulty in finding sources of finance or they get their loan charged with abnormal interest rate because they do not have enough collateral or wealth to support for the loan. But what do we expect much from them? Every man should live his life in fulfillment. (Maharishi) The idea of SGF is to build and act as funding sources which is accessible for poor farmers with talent and high commitment to do natural/organic farming. SGF understands that by converting from conventional form of cultivation to organic form of cultivation requires high capital commitment (for the poor) and it could take 3 to 4 years to enjoy the full benefit. The benefits from organic farming will last for long and it is appreciated by the community. The potential growth of the individual depends on the potential growth and evolution of the environment . (Maharishi) SGF strongly believes that with existing skills in farming and proper training from the SGF plus funding, farmers are able and more than happy to involve in the project. The output in the transition period is usually lower compared to the conventional farming. However, the premium paid on the organic products by consumers can boost the revenue a bit more. At the same time, in the organic farming, the operating costs of farming are less from first year to the next. As a result, farmers save a lot of money on fertilizers and enjoy full outputs when the transition period is over. SGF promotes the use of organic products in the society and currently the trend for the consumption of organic products is rising. Hence educating and creating awareness among farmers is necessary to meet the growing high demand. In Asia, the production of rice is estimated to suffer a decline due to climatic changes - FAO Rice Market Monitor, 2012, Volume XV- Issue no.4.

Rice Field Pictures B. WHAT IS ORGANIC FARMING According to the Foundation of Reclaiming Rural Agriculture and Food Sovereignty Action, Thailand, An organic production system is a production system giving priority to building a solid food foundation and security for families, and not solely a market oriented production process to earn income to buy food. It a production system that promotes mutuality with environment, society, and way of life, and enhances the spirituality of producers It is a production system relying on indigenous knowledge and local wisdom that is appropriately adjusted by local communities. It is a system that can clarify linkages of production system with a social change.

C. VISION SGF envisages a society where all small farming households enjoy good living conditions with the right and power to set their own destiny and at the same time act as a healthy food supplier for the world. D. MISSION - GREEN, GROWTH AND HEALTH To provide financial aid and support to farmers through low interest rates so as to transform agricultural practice. To provide technical support so as to facilitate farmers to transform from conventional form of cultivation to the organic form of cultivation through training of trainers and onsite support. To market the organic agricultural products for farmers thereby helping them to earn value for their labor. E. SCOPE Initially to focus on the training to farmers on organic farming of rice and offer financing to farmers in the rural parts of Cambodia and then to expand to other developing countries like India, China, Sri Lanka etc.

II.

ASSESSMENT OF CURRENT SITUATION

A. KEY FACTS ABOUT CAMBODIA Cambodia is located in the South-East Asia with hot, humid and tropical climate which is favorable for farming business. According to Cambodian Center for Study and Development in Agriculture (CEDAC) and Food and Agriculture Organization (FAO), eighty percent of the population predominantly depends on agriculture. That is why, Cambodian is known as the agricultural country. Among the 14 million population in Cambodia, 52.6% are female and 47.4% are male and 21% of the population (2.2 million), lives in households managed by women. Among them, over 65% are women who are on average have 20% lower literacy rates than men. However, most farmers are struggling with liquidity and so they end up borrowing money from different sources at exorbitant rates. The most popular way of borrowing is through the intermediaries (casual money lenders) in the market and they charge abnormal rates, up to 50% per annum. However since the introduction of Micro finance business in the economy, farmers are happier to borrow at a rate of 25% per annum, which is still higher than the rate at which banks lend to commercial businesses, as they charge only 12%.

B. MARKETING ENVIRONMENT 1. COMPETITORS The main competitors for lending business to farmers are existing Microfinance Institutions and the Not for Profit Organizations which have already involved in the business. Microfinance Institutions act as the lending agents to small households but charges high interest rates in the range of 24% to 37% (Source: National Bank of Cambodia). Existing key players are Prasac Microfinance, Acleda Bank, Li Hour Microfinance, Amret Microfinance, AMK Microfinance and Sathapana. Following table depicts the Market share of the Big 5 Micro Finance players in Cambodia in terms of Loan outstanding. SL No. Name of Bank Loan Outstanding as on Sep 2012 (Million USD) 1. ACLEDA 561.43 2. PRASAC 195.36 3. AMRET 127.96 4. SATHAPANA 112.94 5. HKL 92.90 6. OTHERS 279.14 *Source: Cambodia Micro Finance Association Credit granted by Micro-Finance Institutions and NGOs for 2012 Period Numbers of Loan Outstanding (in KHR Billion) District Commune Village Household Jan 1,848 12,282 64,252 1,177202 2,744 Feb 1,892 11,995 65,286 1,185255 2,804 Mar 1,942 12,197 66,195 1,188096 2,878 Apr 1,955 12,449 66,961 1,204402 2,918 May 2,026 12,669 67,880 1,212694 2,978 June 2,042 12,739 68,548 1,224159 3,032 July 2,044 12,855 69,532 1,240676 3,106 Aug 2,069 13,034 70,861 1,264887 3,198 * Source: National Bank of Cambodia 2. ECONOMIC SITUATION According to Ministry of Economic and Finance, Cambodia economic growth in 2013 is projected to be the same as the growth rate in 2012 at 7% and in the last five years on average the growth rate is 5.8% with $33.5 billion GDP (Heritage Organization, 2013). Interest Rate Monthly Annually 2-3 24-36 2-3 24-36 2-3 24-36 2-3 29-37 2-3 29-37 2-3 29-37 2-3 29-37 2-3 29-37 Market Share (%) 41 14 9 8 7 21

Source: Ministry of Economic and Finance, 2013 Due to the high interest rate and the climate change, there are lot pressures for farmers and it causes hazard to farmers health such as mental problem, insomnia, stresses, stroke, and the even worse, the suicide rates of the farmers are on the rise in various developing countries like India, Cambodia, Sri Lanka. Also the banking system is such that it causes severe mental distress and agony to farmers for the repayment of loan and the interest. Sometimes the banks resort to devious methods of collecting the money which is another reason for the rise in suicide rates. 3. SOCIO CULTURAL SITUATION The unproductiveness in the agriculture activities in Cambodia is the unawareness among the farmers to use the organic farming techniques apart from traditional forms of cultivation, which is more fruitful. Traditional forms of cultivation sucks up the life of the soil which makes it lifeless over a long term. According to Ministry of Agriculture, Forestry and Fishery, the cultivated area is around 3.1 million hectars, while the potential and suitable land for farming is up to 6.7 million hectors across the country. So, Cambodia has huge potential and competitive advantage in farming per capita compared to its neighbour countries like Thailand and Vietnam. There are two seasons for rice farming in cambodia, wet season and dry season. The yield in the dry season is higher compared to the wet season. According to the study of CEDAC, the crop yield of rice farming in the wet season is 2.4 tonnes per hectar while the crop yield in dry season is 3.96 tonnes per heactar. Based on the statistic of Ministry of Agriculture, Forestry and Fishery (MAFF) for the year 1996/1997 and 2006/2007, rice yield has increased more than 20% from less than 2 tonnes per hectar in 1990s to 2.4 tonnes per hectar in 2000s and the capacity

of using the farming areas in wet season is 83% of the total cultivating areas which is equal to 2.58 million hectars, while in the dry season there is only 15% of rice production areas can be used (MAFF, 2007/2008).

Photo by: CEDAC 2008 4. POLITICAL SITUATION The political system in the country is stable and will not have a big impact in our operations. The strategy of the political parties, either the current ruling party or the opposition party, focuses more on the development of agriculture in the country. 5. LEGAL SITUATION To operate as a Non-profit organization, we need to have a License from the Ministry of Interior, Government of Cambodia. As the operations of the organization are in line with the Cambodian Government policy, acquiring of License may not be a hurdle to the commencement of our operations. Our long goal is to move towards the Micro Financing Business for which we require the License from the Central Bank of Cambodia. 6. TECHNOLOGICAL SITUATION Majority of the Cambodian farmers use the traditional ways of harvesting crops manually. We will introduce the implementation of high technology in farming. According to International Federation of Organic Agriculture Movements (IFOAM), Organic agriculture is a production system that sustains the health of soils, eco systems and people. It relies on ecological processes, bio diversity and cycles adapted to local conditions, rather than

the use of inputs with adverse effects. Organic agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and good quality of life for all involved D. SWOT ANALYSIS 1. STRENGTH SGF offers to farmers a low rate of Interest which is significantly lower than current rate offered by existing microfinance institutions. The key distinction of our operation is the elimination of intermediates/ middlemen. We streamline our financial services by eliminating bureaucracy and unofficial fees, i.e. direct funding from fund lenders to borrowers. Furthermore, our ability to bring organic rice from the farmers to market eliminate the need for intermediaries who usually exploit farmers by giving lower price than they deserve. SGF also provide free technical training to farmers in organic rice farming. The organic technique directly contributes and is in line with the soil quality preservation & conservation policies of governments and international organizations around the world. Organic farming helps to alleviate the harmful problems on environment caused by traditional forms of cultivation. The growing market for organic farming in the developed nations is an impetus to developing nations. As a result people started appreciating and acknowledging the importance of healthy food. To meet the growing demand for rice and related products. Reduction in cost of farming inputs. Organic farming has the potential to provide benefits in terms of environmental protection, conservation of non-renewable resources, improved food quality, reduction in output of surplus products and reorientation of agriculture towards areas of market demand. 2. WEAKNESS As a new start up, we need to strengthen our technical expertise in rice farming, which may cause some initial hiccups. Challenges in raising adequate secure funding through contributions, donations, and grants especially from NGOs, World Organizations. Infrastructure limitations like storage facilities for agriculture produces and buildings for carrying out regular business operations may hamper the growth and development of SGF Credit and operational risks may impact the smooth functioning of SGF.

 As SGF financial services do not lay emphasis on securing collateral from farmers for lending purposes, risk of financial loss will be very high as our goal is the empowerment of farmers. The Cost involved in mass advertisement campaigns to advocate farmers on the importance of transition from conventional farming to organic farming could not be justifiable if such marketing methods are unable to sway farmers. This may in turn impact our vision/ goal of a healthy society. Problems on account of surplus paddy stocks, that are collected from the farmers, if SGF would not be able to sell all those produce due to the indifference from the customers or big retailers. 3. OPPORTUNITIES SGF missions are in line with the government policy on poverty alleviation, food programmes, farmers rehabilitation etc. There is a growing awareness in organic farming and consumption around the world. So, there is a huge potential market for organic products. Tremendous opportunities to expand and grow especially in other developing countries like India, China, Sri Lanka etc. The ability to diversity into vertical business lines. In congruence with our goals, SGF has the will to expand to other organic farm products besides rice when our operation reaches stability. Opportunity to cooperate and collaborate with International organizations like United Nations, World Food Programme, World Health Organization etc whose motto is also similar to SGF Taking advantage of the business opportunity to upgrade to Microfinance business. Organic farming relies on crop rotation, integrated pest management, green manure, crop residue, compost and mechanical cultivation to maintain soil productivity and control pests. 4. THREATS Obtaining a Licensing might be an issue for SGF because chemical companies might lobby the government not to issue the license. During the transition period, SGF needs to face high liquidity pressure. Therefore, high capital is needed to accommodate during this period. Gaining trust from donors is the most important part of the business. Possibility of resistance from chemical manufacturing companies and exiting intermediary, especially from the Microfinance. The problems of labor hire or shortages may impact the farming activity.

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 Banking restrictions by the Central Bank or the Government can be an impediment to the operations. 5. SUMMARY SGF will have a thorough and comprehensive business plan for organic rice farming and our lending activity in the event of a major threat either anticipated or unanticipated from the Legal, Regulatory, Environmental (internal or external) and Socio economic situations that the country may face. We will be formulating a Business Continuity Plan (BCP) to assess the various situations that our operations may encounter and take necessary steps to mitigate it. We know will be coming across threats unheard of during the course of our business operations. However we have the several strengths to overcome or minimize our weaknesses whether anticipated or not and to transform or convert those threats into opportunities and achieve success.

III. STRATEGIC PLAN A. MARKET OBJECTIVES

TARGET MARKET By focusing on providing small financing to poor farmer and marketing organic agricultural product, SGF will operate as a niche player and seek to provide product differentiation to our clients. At present, farmers face numerous difficulties in finding finances for their farming operation. Even if they could find a willing financier, the interest rate will usually be very expensive which leave the farmer with low profit margin or even a loss due to less crop yield than expected. Existing microfinance institutions requires farmer to have collateral in the form of land and house. When farmer fail to make the payment, they can face foreclosure on their property. On the other hand, SGF will charge lower interest to farmers and we do not require collaterals from farmers. We will rely on our ability to select good and hardworking farmers to join our financial program which from our opinion is the best way to ensure timely repayment and less default rate. We are willing and happy to work with farmers who are struggling in their cultivation either technical or funding, and we will offer them repayment flexibility and technical supports. Farmers will use the money from our loans to buy seeds, farm animals, farming equipment, and organic fertilizer to produce organic food. They can choose to either sell their agricultural products to intermediaries, local market, or to SGF. SGF helps farmers to sell their products at the highest possible price in order to improve their income and livelihood. Our employees and

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volunteers will work closely with farmer by providing financial advice, technical advice and training to increase farmers return on their investments. Organic rice that we have purchased from farmer will be stored at our warehouse to be resold to restaurants, supermarkets, and hotels that we have established partnership with. Our organic food will be labeled as International Federation of Organic Agriculture Movements (IFOAM) certified organic to differentiate and raise our brand awareness from consumers and partners. The current global and local trend on organic food consumption provides opportunity for SGF to grow and expand in this area. Although there are already existing competitors operating in the organic market like CEDAC, we believe that there is plenty of sufficient market room for SGF to operate in.

**Chart represents the Demand and Supply of the rice production around the world

http://www.fao.org/economic/est/publications/rice-publications/rice-market-monitorrmm/en/ Rice is the major food for people all around the world. According to FAO in 2012/2013 global rice consumption is estimated to reach 475 million tonnes and the consumption of rice per capita is predicted to rise from 56.7 kg in December 2011 to 56.8 kg in the year of 2012. However, rice outputs in 2012 is more than the consumption, therefore rice surplus

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accumulated the global rice carryover stocks is expected to increase to 170 tonnes in 2013 (FAO, 2012, Volume XV). In Cambodia, according to the study by CEDAC in Kampot and Kompon Speu (2010) found that there are only 40% of rice producers have sufficient rice to support their family while another 40% cannot produce enough rice for their own consumption. The research also showed that only 13% to 20% is able to make the surplus. There are two main reasons spotted by CEDAC. First the capacity of farmers to produce rice is limited because there is little training on how to grow rice properly taking the use of fertilizer, proper use of pesticides and the timing to harvest the rice. Most farmers practice weather dependence farming and learn how to grow rice from one generation to generation. Second there is insufficient fund to support farming operations. Therefore, the output of rice is less than expected due to the climate change and drought. FAO 2012 claims that, based on their research, the expected rice production in Cambodia in 2012 experience a decline compared to the production in 2011.

B. MARKETING STRATEGY Concentration:

SGF will be concentrating on the Kraing Yov commune located in Koh Thom District, Kandal province province initially.

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Hiring Experts & selecting farmers:

SGF will try to recruit agricultural experts into our operational team and assigning them to train farmers in the new organic rice production method. In addition to using local experts, SGF will try to find foreign experts who are willing to contribute their skills in the sustainable farming and develop rural areas. The recruitment of the technical experts may take up to 3 months as we need to take into account several factors of the person like the experience, knowledge of the terrain, personal motivation etc. So this process may time consuming and expected to take 3 months.

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Changing from inorganic rice cultivation to organic cultivation involves changes in life style and attitudes towards the natural surroundings, not simply changes in the kinds of fertilizers used in cultivation process. Hence one of our key strategies will be selecting skillful and hardworking agriculturists who are interested in joining the program. These farmers will in turn provide training and advice to the other farmers in order to grow the number of organic farming technique adopters. The key component of finding qualified farmers will be based on background checks, home visits, neighbor interviews and local authorities. Selection of farmers will be accomplished through the following procedures: Visitation to the rural areas and educate the farmers the importance of Green Farming/ Organic cultivation. Select a group of farmers to participate in actual training in organic farming by the technical experts. Provide financial aid to outstanding participants to promote the Scheme. Educate the local consumers the various benefits of consuming organic products in their daily life through rigorous campaigns and advertisements.

Long term Goals:

SGFs long term goal is to expand and diversify our operations to hen we want to upgrade the organization status from not-for-profit to microfinance organization, yet not for profit thereby extending our reach to other parts of the country and also to developing nations as well. Another goal is to expand the organic farming from rice production to other forms of organic cultivations so as to create a healthy and sustainable society.

IV.

MARKETING MIX

A. PRODUCT Sales and Marketing of Organic Products: SGF operates social work to potential and skillful farmers through providing free technical training on organic rice farming and lending at an interest rate lower than the current market rate. Also we will be providing storage and marketing and selling the organic products collected from the farmers.

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We will be providing PH Level testing for farmers to ascertain the nutrient level, chemical level free of charges in order to ensure the success of organic rice farming transformation from traditional farming technique. Financial Services: Our financial services do not require collateral from the farmers and also the lending procedures are not as complicated when compared to the usual banking procedures which can be time consuming and complicated. B. PRICE Pricing is the key competitive edge for SGF to success in the current market. There are some factors that need to be incorporated before setting a price such as customers benef its obtained from using the service and nature of costs incurred from providing the service. Consumers benefits can be classified into three areas, the saving form using the service, incremental revenue from using the service, and/or intangible benefit from using the service. SFG strongly believes that by participating in the project, farmers will benefit all of the above. The reasons are: Cost saving: The interest charge on the loan provided by SGF will be half of the current lowest interest rate charged by Microfinance institutions, 24% and organic rice farming does not required to use chemical fertilizer or pesticide products and according to CEDAC study farmers can save up to 50% of their expense on chemical during the transition period and 100% thereafter. Incremental revenue: Organic rice will be worth more compared to normal rice. Generally, consumers who care about their health are willing to pay premium for organic rice and the trend of using organic rice is increasing. At the same time, practicing organic rice farming will increase higher productivity per unit of land. Intangible benefits: Practicing organic farming will make farmers healthier, promotes the quality of soil, reduce toxic in the water and air, and support for the ecology system in the surrounding environment.

In the meantime, SGF will incur costs to operate the project. Costs can be categorized into variable costs, fixed costs and sunk costs. Variable costs are expenses that will change according to the number of service or outputs such as interest paid to lenders, raw materials for composed fertilizer, training materials, travel expenses, etc. Fixed costs are costs that do not change per change in outputs such as salary paid to experts and employees, rent expense, etc. Sunk costs are cost that

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Since the current interest rate charged by the existing Micro Finance players to farmers is in the range of 24% to 36% which is sky rocketing when compared with the rate of interest for other commercial business purposes. SGF plans to offer interest rate to poor farmers which are compatible with the rate that commercial banks charge to their good clients, 12%, for normal business loans. The notion of charging interest rate is to cover the operating cost including training, administrative work and some other arrangement for the farmers. SGF is able to price half of the current rate that farmers obtained from Microfinance, so we strongly believe that this loan will be very interested by farmers. Organic sale of rice collected from the farmers are priced at the current and comparable market price (Current Price for organic rice is USD 0.8 per Kg). C. PROMOTION SGF will promote awareness among current farmers about advantages and disadvantages of current practice of growing rice. In the meantime, SGF will touch on the benefits of organic rice farming, the development of current market shares for organic rice, the premium paid for organic products, and sustainable At the same time, SGF will contact to various international organization or interested parties for technical assistance or volunteers. This is a good way to attract talented and experience expert in organic farming and share his experience with Cambodian farmers. The various promotion techniques that SGF will use includes through radios, posters, personal and face to face interactions by our volunteers, community gathering, seminars, Governmental events, etc. D. PLACE Cambodian is the good place to start because it is known as the agriculture country. SGF will start its operation in the area around the capital city, Phnom Penh, with enough water and good irrigation system. We chose Kraing Yov commune located in Koh Thom District, Kandal province. This is the new village created and supported by Prime Minister; therefore, many infrastructures have been constructed such as roads, irrigation systems, schools, and hospitals. Meanwhile, most of them are focus on agriculture.

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V.

IMPLEMENTATION

A. STRATEGIES 1. FINANCING Capital:

SGF main sources of finance will come from NGOs, Government and World Bodies through donations, grants, etc. who are very much interested on improving and developing living standard of poor farmers. We will approach international organizations like Asian Development Bank (ADB), World Food Program (WFP), International Finance Corporation (IFC), Food and Agriculture Organization (FAO), etc. for low interest rate loan or ergo interest rate for promoting poor standard of living through conducting organic farming operation. SGF will be contacting with mutual interest individuals such as Howard G Buffet Foundation who in 2009 disbursed about USD 38 million to African farmers. Operating Income:

Interest income and sales of organic products will be our primary sources of income while at the same time maintaining low operating costs by having few offices and employing service of volunteers and few numbers of paid employees will lower our operating costs to ensure our sustainable operation.

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Financial Projection for the First 5 years The table below presents the 5 years financial projection for SGF. The assumptions are based on the projected growth of SGF over the next five years. During the first three years of operation, our main revenue source will come from our interest income from loans outstanding. From 2017 onward, SGF plan to incorporate organic rice sale into our operation with the increase in funding obtained.
Expected Number of clients Number of employees (Expert) Number of volunteers 50 1 5 100 1 10 200 2 15 300 2 20 400 3 25

Projected Income Statement

Interest Income Organic rice sales Total income Interest and fee expenses Cost of good sold (organic rice) Gross margin Incr./(Decr.) In provision Personnel expenses Administration expenses Miscellaneous Expenses Net Income Loan outstandings Fund for buying organic rice Fund for operation expenses Total fund needed Own's fund, donation and grant Borrowings ROI Net income margin Assets turnover Cost/Tonnes Qty of rice purchased Sales price/Tonne Increase % in income Allowance for bad debt on Balance sheet Increase in provison

2014
4,200 4,200 4,200 350 12,000 1,400 1,000 (10,550) 35,000 15,000 50,000 50,000 -21.10% -251.19% 0.08 350 350

2015
8,400 8,400 650 7,750 350 12,000 1,500 1,200 (7,300) 70,000 20,000 90,000 80,000 10,000 -10.43% -86.90% 0.09 100% 700 350

2016
16,800 16,800 2,925 13,875 700 24,000 1,600 1,400 (13,825) 140,000 25,000 165,000 120,000 45,000 -10.84% -82.29% 0.10 100% 1,400 700

2017
25,200 91,429 116,629 5,200 80,000 31,429 700 24,000 1,700 1,600 3,429 210,000 80,000 30,000 320,000 240,000 80,000 1.41% 2.94% 0.36 350 229 400 594% 2,100 700

2018
33,600 114,286 147,886 4,225 100,000 43,661 700 36,000 1,800 1,800 3,361 280,000 100,000 35,000 415,000 350,000 65,000 0.91% 2.27% 0.36 350 285.71 400 27% 2,800 700

**See Appendix-1 for the Pricing Assumptions

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2. -

TECHNICAL Standards setting:

IFOAM (International Federation of organic agriculture movement) sets the International Standards for organic farming. This is the framework based on which SGF functions. Some of the organic principles are: (**Source IFOAM, 2005; see www.ifoam.org ) a. Principle of Health: Organic Agriculture should sustain and enhance the health of soil, plant, animal, human and planet as one and indivisible. b. Principle of ecology: Organic Agriculture should be based on living ecological systems and cycles, work with them, emulate them and help to sustain them. c. Principle of fairness: Organic Agriculture should build on relationships that ensure fairness with regard to the common environment and life opportunities. d. Principle of care: Organic Agriculture should be managed in a precautionary and responsible manner to protect the health and well being of current and future generations and the environment. - Licensing: a. In order to start our operation as a not for profit organization, we must first seek license approval from the ministry of interior. b. Obtain License from the Central Bank of Cambodia to function as a Money Lending Organization. TIME FRAME Years 0 -5 Plan Providing Agriculture Loans at low rate of interest to farmers Recruitment of Technical Experts in 3 months. Provide Technical advices to farmers for organic rice farming. Mass Advertising campaigns to create awareness among farmers on the importance and benefits of Organic farming. Conduct Campaigns among consumers on the health benefits of organic products. Help the farmers to market the organic agricultural produces at a competitive rate. Diversify into other forms of organic farming from rice production. Develop into a Micro-financing, yet not for profit organization so as to develop the other backward sections of the society. Establish Other Not for Profit organizations in Developing countries like Indonesia, Thailand, India, Sri Lanka, China etc.

5 10

> 10

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Collaborate and associate with World Organizations to establish similar style or functioning of organic cultivation so as to empower the debt stricken poor farmers in other countries.

VI.

APPENDEX 1. Pricing Assumptions:

Particulars Interest charged from farmer Total Finance Borrowing Own's fund and grant Loan size Average Intest expenses Portfolio at risk In Riel USD 12% 50000 15000 35000 700 6.50% 1% 2,500,000.00 625.00

Total organic farming cost per hectare

The Interest rates of 12% are based on the rates at which the Banks usually lend for commercial businesses as SGF believes on the fair dealing to farmers, who have been charged at 24 -37% currently on average. Total organic farming cost per hectare is based on the study of CEDAC 2010. The study found that in order to grow rice, it costs about KHR 2.5 million Riel (Equivalent to USD 625) per hectare. Portfolio at risk (PAR) percentage of 1% is based on the assumption that Cambodia microfinance sectors PAR remain below 1%. A study conducted by the International Finance Corporation (IFC) based on 19 MFIs which showed that the evolution of PAR percentage within Cambodia from 2005 to 2008 remained way below 1%.

2. Statistics on Farmer Suicide rates around the world India:

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The number of farmers who have committed suicide in India between 1997 and 2007 now stands at a staggering 182,936. Close to two-thirds of these suicides have occurred in five states (India has 28 states and seven union territories). The Big 5 Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Chattisgarh account for just about a third of the countrys population but two-thirds of farmers suicides. The rate at which farmers are killing themselves in these states is far higher than suicide rates among nonfarmers.(Source Wikipedia: http://en.wikipedia.org/wiki/Farmers'_suicides_in_India ) In 2006, the state of Maharashtra, with 4,453 farmers suicides accounted for over a quarter of the all-India total of 17,060, according to the National Crime Records Bureau (NCRB). NCRB also stated that there were at least 16,196 farmers' suicides in India in 2008, bringing the total since 1997 to 199,132. Thailand: A total of 560 suicides were recorded in Thailand between July 1997, when the economic crisis began, and June 1998-- double that of previous years. Somchai estimates the financial crisis was behind 24 percent of the deaths. Three-quarters of the victims were men. (**Source: http://www.reocities.com/Yosemite/7915/9901/THA-Suicides2.html)

VII.

SCI POINT

A. The evolution of the environment has to be incorporated in maximizing the potential growth of the individual and the society. Everything on this earth is interdependent and interrelated. So it has both negative and positive impacts. In order to balance these impacts and to ensure the full potential growth of the individual and the society, the evolution of the environment needs to be considered and use with care. TM technique, through the development of creative intelligence, is the only solution to all problems of the environment because it helps to produce knowledgeable man in the society. The poverty gap needs to handle with care and both poor and rich can live their life in a harmony way. The ultimate goal of SGF is to make every mankind on this earth enjoy their fulfillment and happy life. B. The goal of SGF is to build and act as funding sources which is accessible for poor farmers with talent and high commitment to do natural/organic farming. SGF understands that by

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converting from conventional form of cultivation to organic form of cultivation requires high capital commitment (for the poor) and it could take 3 to 4 years to enjoy the full benefit. The benefits from organic farming will last for long and it is appreciated by the community. The potential growth of the individual depends on the potential growth and evolution of the environment. (Maharishi) C. Rose and Sap In order to keep the rice healthy and obtain the potential output, the soil should be nutrient rich enough to support the growth of the rice. It is like the Rose and Sap analogy. Maharishi uses this analogy to explain the quality of life which is supported by pure creative intelligence. The sap is the colorless substance that provides nutrition to the rose. The rose represents all the manifest creation of the sap. So the sap creates itself as the leaves, the stem, the thorn, the color and the flower. When we meditate, we can experience the pure creative intelligence which is the source of everything. Pure creative intelligence provides intelligence that is able to release stress from the nervous system. When life is free from stress, we will enjoy the most happiest and fulfillment in life. In the same manner, the sap represents pure creative intelligence which is the basis of all manifest creation. We know that by contacting to the pure creative intelligence we can remove obstacles that prevent the full sunshine in our mind and can manifest into different activities and achievements in life. It is like the sap provides all nutrition to support every part of the rose. As a result, poor farmers will live their lives happily and in harmony. D. Water the root to enjoy the fruit SGF believes that to maximize the crops outputs, we need to take good care of the rice root by providing water. Then the root will take good care of every part of the whole rice by itself. This is like the analogy Water the root to enjoy the fruit. Maharishi explains the analogy Water the root to enjoy the fruit to explain the efficiency and effectiveness of accomplishing the goal. The farmer knows that all he has to do in order to keep the rice healthy is to give water to the root, to enhance the quality of the root and then the rice will take care of itself spontaneously every part of the rice, the leaves, the stem, the pedal, the color, the trunks, the flowers and the crops. If we try to make the leaves clean, we can make it clean for a while but it will not last for long. And like that when we meditate it like we are watering the pure field of creative intelligence which is the basis of all individual activities in our life. And by contacting the root of thought, it we nourish our life, the mind, body and behavior.

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In the same manner, the root is like the pure creative intelligence and watering the root is like practicing the TM technique. The life is the function of the root that provides nutrition to support every part of our life which is the fruit.

VIII. REFERENCES 1. 2013 Economic Freedom Cambodia. Heritage. Retrieved from <http://www.heritage.org/index/country/cambodia>. Feb 1, 2013 2. Proposed Strategies to Utilize the Potential of Rice Production in Cambodia. CEDAC. Retrieved from <http://www.cedac.org.kh/Potential%20of%20Rice%20Production% 20in%20Cambodia.pdf>. Feb 2, 2013 3. FAO Rice Market Monitor (RMM). Food Agricultural Organization. Retrieved from <http://www.fao.org/economic/est/publications/rice-publications/rice-market-monitorrmm/en/>. Feb 2, 2013 4. Walaiporn Od-ompanich, Areerat Kittisiri and Manitchara Thongnoi. (2007) Organic and Inorganic Rice Production A Case Study in Yasothon Province, Northeast Thailand. Malaysia: Pesticide Action Network Asia and the Pacific (PAN AP) 5. Organic Rice Farming Systems in CAMBODIA: POTENTIAL AND CONSTRAINTS OF SMALLHOLDER SYSTEMS IN TAKEO PROVINCE. Sa Kennvidy. Retrieved from

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<http://kennvidy.files.wordpress.com/2007/11/organic-rice-farming-potential-andconstrains-of-smallhoder-systems-in-takeo-province.pdf>. Feb 2, 2013 6. Rice value chain study: Cambodia A report Prepared for the World Bank. Agrifood Consulting International. 7. Economic and Monetary Statistics (August 2012). National Bank of Cambodia. Retrieved from <http://www.nbc.org.kh/english/publications/economic_and_monetary_statistics.php>. Feb 3, 2013 8. Rice Value Chain Study in Kampot and Kampong Speu January 2010, Centre d'Etude et de Dveloppement Agricole Cambodgien (CEDAC). Retrieved from < http://www.cedac.org.kh/field%20note004.pdf>. Feb 3, 2013 9. Maharishi Mahesh Yogi, (1973) Creative Intelligence and Consciousness, Science of Creative Intelligence: Teacher Training Courses. Fairfield, Iowa: Maharishi University of Management Library. Feb 3, 2013 10. Working in the Context of Todays Crisis, Managing the Risks and Challenges Cambodias Microfinance amid the Global Financial Crisis Conference Proceedings. International Finance Corporation. Retrieved from < http://www1.ifc.org/wps/wcm/ connect/316b85804ba0bd5da24de71be6561834/CambodiaFinancialCrisisConfProceedings-Final.pdf?MOD=AJPERES> Feb 4, 2013

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