DRAGON FRUIT INDUSTRY IN BURGOS, ILOCOS NORTE

A CASE STUDY1/

INTRODUCTION

Dragon fruit (Hylocereus undatus) or “Pitaya” in Tagalog is a member of the

cactus family (Cactaceae), which originated from Mexico and Northern South America.

The potential of Dragon fruit is bright because it commands a very high price in

the local market. No wonder that, it is now dubbed as the new money crop – truly, a high

revenue earner for farmers.

Organization and Human Resource Management is one of the most important

aspects of any enterprise. All among of company’s goals and objectives normally

depends on the organizational framework, management effectiveness, and cooperation of

all the employees within the organization.

Fortunately, Dragon fruit is a low maintenance plant because it can be manned by

one or two individuals per hectare. For they have a monthly schedule for watering,

putting organic fertilizer, and keeping up the area.

The REFMAD V- Enterprise is one of the pioneers in the Dragon fruit industry in

the Philippines with 20 hectares’ farm located in the province of Ilocos Norte. This was

started by the Dacuycuy family. And with plantations expanding in various areas in

Luzon, Visayas and Mindanao through other growers of Dragon fruit, their propagation

also gone beyond Ilocos Norte.

________________________________________
1/Undergraduate case study presented in partial fulfillment with the degree Bachelor of Science in
Agribusiness, Central Luzon State University, Science City of Muñoz, Nueva Ecija. BSAB Contribution No.
01-SY 2018- 2019. Prepared by Dessa Mae L. Angeles of the Department of Agri-Management under the
supervision of Mr. Clodualdo V. Velasco.
 Company’s Background

In 2005, Mrs. Edita Aguinaldo- Dacuycuy, a psychologist together with her

husband, started the Dragon Fruit Farm in backyard scale with only 25 saplings, which

cultivated, and sold as ornamental plants. She decided to expand her backyard farm in

2006, utilizing its 5-hectare farm at Barangay Paayas, Burgos, Ilocos Norte, which was

registered as the first Dragon Fruit Plantation in Region I, and named as Rare Eagle

Forest Machine Agricultural Development (REFMAD) Enterprise.

Moreover, the Department of Trade and Industry (DTI) had designated Dragon

fruit as the one-town-one-product of Burgos, Ilocos Norte. While, the Department of

Tourism had included REFMAD-V farm as part of its itinerary for local and foreign

tourists.

The farm occupies a total land area of 20 hectares of which 13 hectares were

planted with Dragon fruit, five hectares for the construction of buildings, facilities and

other amenities, and two hectares remained idle, and utilized for road networks.

Meanwhile, the total production of the farm has reached minimum of 22, 578 posts of

Dragon fruit that bears 20 kilograms per posts annually.

The Dragon fruit plantation housed a resort, restaurant, and fish farm, which

attracted tourists. There were also home –stay facilities called Cabanas for visitors who

wanted to watch the flowers of the vine bloom, and glow in the dark, while taking in the

aromatic scent that enveloped the farm. The farm has bakeshop, winery, ice cream room,

storage room, sorting area, fishpond, and staff house.

To date, the farm serves as a show window for Dragon fruit industry in the North

that provides employment, and livelihood opportunities to Dacuycuy’s relatives, and

nearby community residents as well. Recently, Mrs. Dacuycuy developed several Dragon

fruit-based recipes, and processed products, such as wine, tea, coffee, vinegar, ice cream,

shanghai cookies, and many more.

Vision

REFMAD as a leading way for growers with regards to innovations produced,

and envisioned the growers to participate in marketing their produced crop.

Mission

To inspire and uplift the living conditions of small farmers-by becoming a show

window of a science and technology based farm, maintaining zero-waste agriculture,

applying innovative technologies, and capturing opportunities for profitable growth.

Location and Size of the Farm

The site of the farm is located at Brgy. Paayas, Burgos, Ilocos Norte. It is barely

1500 meters away from the main highway of Burgos, and 55 kilometers away from

Laoag, Ilocos Norte capital city (Exhibit 1).

The estimated land area of REFMAD farm is 200,000 sq m. intended for Dragon

fruit production, nursery area, fish pond, facilities, buildings, and other farm inputs

(Exhibit 2).
 ORGANIZATION ASPECT

Organization and Management is the process of leading a company, and

effectively using or controlling its assets and resources (Leonard, 2018). It gives a sense

of direction to the employees. The individuals are aware of their roles and

responsibilities, and know what they are supposed to do in the organization

(https://www.managementstudyguide.com, 2018).

Organizational Structure

An organizational structure is a system that outlines how certain activities are

directed in order to achieve the goals of an organization. These activities can include

rules, roles, and responsibilities. It also determines how information flows between levels

within the company.

However, performing too many activities at one time can cause stress levels, and

can lead to absences, and disability claims at work. Anxiety associated with multi-

tasking, and mismatched job description in the workplace can reduce productivity, and

has negatively impact to REFMAD profits, especially they only have few employees.

REFMAD adopts a line organizational structure, wherein the decisions are carried

out from top to bottom. It is headed by the Owner/Manager. Under the Owner/Manager

are the Administration/Finance, Company Doctor, and Operation-in charge that assists

her. The House head reports to the Admin and under the House head are the

Maintenance/Utility, Baker, and the On-call farm workers. While, Wine processors,

Driver/Utility, Housekeeper, and Farm head are under the supervision of the Operation-

in-charge. Below the Farm head are the four farm staff (Exhibit 3).
 Salaries and Fringe Benefits

The employees of REFMAD V- Enterprise receive their salaries every 30th day of

the month. Some farm laborers received Php 200.00 per day that is under the daily

minimum wage rates in Ilocos Region, which Php 252.00. The laborers monthly salary

ranges from Php 4,000.00 or depends upon the overtime or overload pay of the

employees. No additional income is received by the farm laborers despite of the increase

in the number of job done by the workers.

But, Fringe benefits are given to the employees as mandated by the Department of

Labor and Employment (DOLE). These include Social Security System (SSS), and

PhilHealth. The farm does not have PAG-IBIG, 13th month pay, and other bonuses or

incentives at work.

Duties and Responsibilities

The REFMAD V- Enterprise is composed of 14 personnel, their actual duties that

do multiple tasks are found below:

1. Owner/Manager

Edita A. Dacuycuy is the owner of the farm. She has been managing the farm for

13 years. She is responsible in the overall operation/production, and supervises the lower

employees. She also promotes the product of the company by attending trade fairs, and

seminars to find more clients and cooperators. She even does consultation to the clients,

who also venture of Dragon fruit.

2. Administration/Finance
 Madeline Long-Gat is in-charge for transferring, and computing the sales in the

ledger. She also checks the number of attendance of each worker to calculate their

workload salaries every month. She processes, and cleans the store, while attends in the

farm three times a week.

3. Company Doctor

Francisco A. Dacuycuy is the son of the owner/manager and graduated as a

Doctor. He has a Clinic in Pasuquin, where you can find him. He is responsible for

checking the employees’ health but does not attend in the farm.

4. Operation-in charge

Mildred A. Dacuycuy is one of the daughters of the owner/manager. Her job is to

promote the products of REFMAD in social media. She is in-charge in the production of

Dragon fruit, and maintaining the cleanliness in the farm. She also does different

workloads by attending seminars international.

5. House head

Juanita Garalde is assigned at the store doing sales and inventories. She cooks

meals for the owner, and other higher authorities. She is in-charge in taking care of the

store, while processing products of REFMAD. She also calls other employees to help her,

if needed (Exhibit 4).

6. Baker

James Brin’s job is to produce or bake goods. He attends twice a week to cook

goodies. But, when he is absent, and has no stock of goods, they do not have any choice

but to wait for his return because they want the same taste of the goodies through him.

7. Farm Head
 Mae Dugay’s job is in production of Dragon fruit. She attends trade fairs, when

the owner/manager needs help. She also helps in processing wines (Exhibit 5).

8. Housekeeping

Elena Garalde is the daughter of the House head. She processes the production of

Dragon fruit as well as maintains cleanliness around the main house. She also does

cuttings, and other courses in the nursery, and production area.

9. Wine processor

Chris Villa is responsible for processing wine. The owner/manager treated him as

part of the family because of his loyalty. He also acts as a driver of the owner and cleans

Cabanas, where clients can stay.

10. Maintenance/Utility

Jennifer Onnagan and Rommel Palencia are both designated to perform duties in

production and repair damaged and fallen posts of Dragon fruit. They are also responsible

in doing workload in the production of Dragon fruit and maintaining cleanliness of the

pool in the farm.

11. Farm staff

Christopher Barruga, Rose Brin, Janice Palencia, and Everjoy Domingo are

responsible in doing cuttings, watering plants, harvesting flowers and fruits, bundling

cuttings, sun drying flower of Dragon fruit, and calling the two lady farm workers to help

the House head to process, if needed.

Official Working Hours

 The employee’s standard one man-day is equivalent to eight hours of work with

one-hour break. The official work time every day starts at 7:00 AM and ends at 5:00 PM.

The employees have two day-off from work, and have different schedule for continuous

operation of the farm (Exhibit 6). Every employee log in into their attendance sheet,

which after work they will write the job duties they have done (Exhibit 7).
 PRODUCTION ASPECT

Production and Operation Management is about the transformation of production,

and operational inputs into “outputs” when distributed, and meet the needs of customers

(https://www.tutor2u.net). Production Management involves using resources judiciously,

to create acceptable products. In this case, raw materials are being transformed into

value-added products efficiently. In other words, decisions such as quantity, quality,

price, design, packaging style, and material for the product, among others, are made by

the management.

Sources of raw materials

REFMAD produced fresh Dragon fruit that is used to process different goods.

There are 22, 578 poles of Dragon fruit that can harvest 20 kg. each poles. The farm also

keeps Dragon fruit powder, and syrup to maintain the process of goods even off-season.

Products Offered

REFMAD farm develops Dragon fruit-based products that had found a steady

market. The plants’ dried flower were turned into Dragon fruit tea, shanghai lumpia, ice

cream, ice candy, cookies, hopia, bread sticks, toasted mammon, otap, wine, and vinegar.

And, the extract juices of the Dragon fruit flesh were turned into coffee, and powdered

juice. It will also can made into Dragon fruit pulvoron, and gelatin. While, its stem or leaf

extract was turned into bath soap (Exhibit 8).

Services Offered
 The Dragon fruit plantation housed a resort, restaurant, and fish farm, which

attracted tourists. There were also home –stay facilities called Cabanas for visitors who

wanted to watch the flowers of the vine bloom, and glow in the dark, while taking in the

aromatic scent that enveloped the farm. The farm has bakeshop, winery, ice cream room,

storage room, sorting area, fishpond, and staff house.

In addition, the owner of the farm has consulting activities to the clients, who

want a guide in farming Dragon fruit.

Operation Process

The Dragon fruit takes about 50 days to reach maturity level, after flowering and

pollination occurs. And, it bears fruits for five months every year, usually from early

summer to mid-fall.

The operation process of the farm starts in farming and harvesting Dragon fruit,

processing goods out of it, and selling fresh Dragon fruits, and processed goods.

On the other hand, the harvested Dragon fruit placed, with 60% availability for

dealers and walk-in buyer, and 40% for processing goods (Exhibit 9).

Inventory Management

The farm keeps accurate inventory records as a major management tool that

enables to serve its clients the right volume of orders.

REFMAD has its inventories, for finished goods that are ready to be sold, and raw

materials that still in the production process. Its inventories are written in notebooks,
available in the store, which also used for the record of products sold. They practice first

in, first out inventory system to maintain the quality of their products.
 MARKETING ASPECT

Marketing management is the art and science of choosing target markets, and

getting, keeping, and growing customers through creating, delivering, and

communicating superior customer value (Kotler and Keller, 2008:5). It is the process of

planning and executing the conception, pricing, promotion and distribution of ideas,

goods, and services in order to create, exchange and satisfy individual and organizational

objectives (Grӧnroos, 1989).

Product/Service Feature

REFMAD is one of the largest Dragon fruit plantation in the Philippines. It offers

organic fruits with different varieties, and processed products made of Dragon fruit, such

as coffee brew, tea, shanghai, goodies, and wine. Dragon fruit is a beneficial fruit with a

healthful nutrition profile.

REFMAD offers resorts, and Cabanas in the farm, where people can relax and

have the consultation of the clients, who want to venture Dragon fruit farm.

They also participate different trade fairs, and exhibit to help them introduce their

products in the market (Exhibit 10).

Product Pricing

The prices of all products, and services are set by the owner/manager. They used

cost-based approach to determine the prices of different products. According to the

owner/manager, the prices of their products maintain high price by claiming that their

products have health benefits (Exhibit 11).

 Product Promotion

The farm promotes their products through social media, and trade fairs. And, it is

handled by the Operation-in-charge, with the supervision of the owner, and help of the

farm staff.

Product Distribution

REFMAD farm’s steady market included traders from the neighboring provinces

of Ilocos Sur, Cagayan Valley, Isabela, DOLE Philippines in Metro Manila, and hotels in

Ilocos Norte. There are instances that the produced Dragon fruit by the farm decreased in

volume, which affects the delivery to the different traders.

 FINANCIAL ASPECT

Financial management means planning, organizing, directing, and controlling the

financial activities, such as procurement, and utilization of funds of the enterprise. It

applies the general management principles to financial resources of the enterprise

(www.managementstudyguide.com).

The Admin/Finance is in-charge of managing financial resources of the farm. All

assets of the farm are provided by the owner, including the buildings, and land of

REFMAD V- Enterprise.

The harvested Dragon fruit in REFMAD every season has the total of 451,560

kg., which Php 250.00 per kilogram. The total fresh Dragon fruit that is for sale are 270,

936 kg. (60% for sale, 40% for processing), with the total of Php 67, 734, 000.00. There

are several buyers of Dragon fruit that REFMAD must sustain to supply every harvest.

But unfortunately, the internee was not able to get any financial statements of the farm

for confidential reason.

 CASE ANALYSIS

Point of View: Dessa Mae L. Angeles (Agribusiness Case Analyst)

Problem Situation: Multi-tasking and Mismatched Job Description and Job

Specification of most workers

REFMAD Farm is known for producing fresh and processed Dragon fruit. It

maintains 14 employees to perform different on-farm and off-farm activities of the

enterprise. Due to limited manpower, multi-tasking of personnel is commonly observed

in the farm.

Employees doing multiple-task simultaneously is reflective of diminished focus.

This usually results in producing poor work quality associated with mismatched job

description, and specification of what duties they need to do. Also, multi-tasking is a time

waster for employees, since they need to switch from task to task.

Cause of the Problem: No Formal and Well Understood Job Description resulting to

Multi-tasking, and Role-conflict among employees

The 14 employees working in the farm have job title but do not have specific

duties to perform to which they are accountable. They just do their and their co-worker’s

unfinished, who already starting a new one. Every employee log in into their attendance

sheet, which after work they will write the job duties they have done. The owner will

base on the attendance sheet the salaries of her employees.

Objective: To formulate human resource management decisions to prevent multi-tasking,

and role-conflict among personnel.

Decision Criteria:

CRITERIA DESCRIPTION WEIGHT (%)

Timeliness Capability of the alternative to solve 20
the problem immediately.
Cost efficiency The capability of the alternative to 25
solve the problem economically.
Employee morale Capability of the alternative to 30
satisfy, and increase the confidence
of employees at work.
Acceptability of Management Capability of the alternative to 25
convince the management for its
implementation.

Areas of Consideration:

1. Existing Workforce of the Farm

At present, the farm has 14 existing employees. It adopts a line

organizational structure, wherein the decisions are carried out from top to bottom.

It is headed by the Owner/Manager. Under the Owner/Manager are the

Administration/Finance, Company Doctor, and Operation-in charge that assists

her. The House head reports to the Admin and under the House head are the

Maintenance/Utility, Baker, and the On-call farm workers. While, Wine

processors, Driver/Utility, Housekeeper, and Farm head are under the supervision

of the Operation-in-charge. Below the Farm head are the four farm staff.

2. Compensation of Workers

The farm provides benefits to their employees, such as SSS, and Philhealth.

And, the salary given to them is Php 250.00 per day, and for overtime fee is Php
 30.00 per hour. But unfortunately, no bonuses, no holiday pay, no rewards or

incentives, and no 13th month pay given them.

3. Employees Training and Development Program

REFMAD V-Enterprise has no training program for enhancement, and

development of its employees. The management pays less attention to enhance the

skills, and knowledge of its employees to fully contribute to the farm’s goals and

objectives. Although, there are training programs offered by private farms, this

opportunity is not tapped by the management to enhance its employees’ growth

and development.

Alternative Courses of Action:

1. Initiate in-house workshop, and Conduct team building initiatives among

management and staff.

REFMAD exists for more than 10 years already. It has the same

employees but do not have any recreational activities for them to communicate,

and be motivated. Training, and Team building tend to improve productivity, and

motivation. This will also serve as venue to discuss the changes or formulation of

organizational structure, job description, and job specification among employees.

ADVANTAGES:

With this alternative, the employees will be eased out of some

responsibility burdens. Functions, and responsibilities are delegated based on

 one’s field of specialization, thus, resulting to higher probability of achieving

better efficiency.

DISADVANTAGES:
This alternative requires a sacrificial time for the farm. If the training must

be attended by all the employees, there will be no employees left to operate the

farm. In some cases, the farm must be closed, for a day, for the training, and team

building purposes. Training, and team building also need budget to be fulfilled.

2. Execution of policies, and procedures regarding farm workers

This starts with improving the employees’ compensation policies.

Management must outline, whether employees will be paid or it will be once a

week or twice a month as well as the guidelines on bonus, and reimbursement for

mileage, and other work-related expenses. The farm owner has to set general

policies regarding employees’ conduct. Therefore, employees are expected to

report to work as scheduled, and on time.

ADVANTAGES:

With this alternative, it helps to improve workforce morale, worker

retention, and job satisfaction. In addition, it provides employees, with knowledge

about what is expected to them in the workplace, and provides clear framework

for the delegation of job duties and responsibilities each them.

DISADVANTAGES:

This alternative requires financial investments necessary to establish the

policies, and procedures for the farm workers. The owner needs to outsource the
 development of their workplace policies, pay for research, and for legal

consultation.

Evaluation of Alternatives:

CRITERIA ALTERNATIVE 1 ALTERNATIVE 2

Timeliness 17 17
Cost efficiency 21 22
Employees morale 26 28
Acceptability of 24 23
Management
TOTAL 88 90

Recommendation and Operationalization: After evaluating the two alternatives, the

management is advised to execute policies, and procedures regarding farm workers.

Specifically, this alternative should be implemented immediately to improve employees’

morale in the workplace, and improve their performance that can lead to increase sales of

the farm.

Potential Problem: It could limit the ability of the owner to make quick decisions, and

difficult to implement changes. Therefore, if the employee consistently violates the

policies, and procedures of the farm, the owner cannot simply fire that employee without

going through formal process.

Fallback solution: That is why the farm should always have a written copy of the

employees’ policies, and procedures that they can access. This will help to protect the

farm from liability, if someone violates the policy in a manner that could lead to legal

action.
 EXHIBIT 1

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Location Map
 EXHIBIT 2

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Facilities and Amenities
 EXHIBIT 3

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Organizational Structure

EDITA A. DACUYCUY
Owner/Manager

MADELINE LONG-GAT FRANCISCO A. DACUYCUY MILDRED A. DACUYCUY

Admin/Finance Company Doctor Information and Communication
Technology/Operation-in-charge

JUANITA GARALDE
House Head

CHRIS VILA JENNIFER ONNAGAN

Wine Processing Driver/Utility/Maintenance
ROMEL PALENCIA JAMES BRIN SPECIAL PROJECTS
Maintenance/Utility Baker OJT’S
On-call farm MAE DUGAY ELENA GARALDE
Contract workers Farm Head Housekeeping

CHRISTOPHER BARRUGA ROSE BRIN JANICE PALENCIA EVERJOY DOMINGO

Farm Staff Farm Staff Farm Staff Farm Staff
 EXHIBIT 4

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

House head of the farm sealing the tea in the counter
 EXHIBIT 5

REFMAD DRAGON FRUIT INUSTRY CASE STUDY

Farm head doing the work of wine processing
 EXHIBIT 6

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Working Schedule of Workers
 EXHIBIT 7

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Logbook of Attendance, and Actual Job performed by employees
 EXHIBIT 8

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Dragon Fruit Processed Products
 EXHIBIT 9

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Flow of Operation of the Farm

PRODUCTION OF
DRAGON FRUIT

HARVESTING

PROCESSING END BUYERS OF

FRESH FRUIT

STORE

END BUYERS OF
PROCESSED GOODS
 EXHIBIT 10

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Attending Trade Fairs
 EXHIBIT 11

REFMAD DRAGON FRUIT INDUSTRY CASE STUDY

Prices of Processed Product