The Profitability Analysis of Palay Production in the Municipality of Bulan: An Assessment of Financial Conditions

The study investigated the financial practices, profitability, and challenges faced by palay farmers in the Municipality of Bulan. This provided relevant insight in the improvement of financial management practices. The research particularly focused examination on budgeting, recordkeeping, and credit management employed by farmers together with the total cost incurred and average yields in farming operation. The study assessed profitability level through various key metrics: Gross Profit Margin, Return on Sales, and Return on Equity in all three major producers of palay in the area- San Francisco, Somagongsong, and San Ramon.Findings suggest that even farmers demonstrate awareness in budgeting, inadequate record keeping and credit management limits their ability to assess financial performance effectively. Productions cost vary significantly across locations, with land rental as the primary contributor that impacted profitability. Despite high gross profit margin across locations, inconsistent profitability in terms of return on sales is evident, particularly due to high fixed costs specially in Somagongsong. Additionally, farmers reported several challenges in their farming activities, which includes limited capital, natural disaster, crop pests, weather condition, high production costs, limited access to credit, and labor shortages that hinders sustainable farming operations.The study highly recommends a need for financial education and management training, exploring alternative land rental arrangements, and conducting regular financial performance assessments. By addressing these areas, this empowers palay farmers, enhance profitability, and promote sustainable financial and agricultural practices in the area.