Terms of Reference
Compost Marketing and Pricing Study
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Background
There is intent to evaluate the sustainability of a composting operation that would achieve
revenues from recyclables sorting, compost sales, and carbon finance for green house gas
emissions avoidance. The private sponsor would make the necessary facility investments
on land provided by the local government. Sustainability would depend on incoming
waste quality and resulting anticipated compost quality, local market demand and
willingness to pay for the various recyclables and compost products, and anticipated
green house gas emissions avoided.
Objectives
The objectives of this work are as follows:
 Examine and verify the estimated material balance process flows of various
incoming wastes anticipated and the outgoing flows of recyclables and compost
products, together with the green house gas emissions avoided.
 Survey local markets for potential revenues, sensitivity to pricing, and willingness
to pay.
 Examine and verify the facility investment and operating costs relative to the
costs for each process flow stream and estimate potential revenues for each
material process flow stream to assess cash flow needs and sustainability.
 Provide expert recommendations based on the findings and analysis of wastes,
potential products and markets regarding a phased development of the compost
operation, with growing production over time of high grade compost for sales to
farmers and gardeners, versus early focus on revenues from carbon finance.
Scope of Work
Task 1
Examine all available reports prepared by the project sponsor regarding material balance
process flows and anticipated waste quality, including agreements reached between the
local government and the project sponsor. Use this material to develop materials process
flow diagram for the purposes of this study of the various incoming wastes, including
separate components of yard waste, clippings, market wastes, restaurant wastes, bones,
slaughter wastes, household putrescible organics and other potentially compostable
wastes. Assess how much of this organic material can be source segregated to arrive at
the plant in a clean state for high quality compost production, versus the remainder that
would arrive for lower grade compost production. Also, examine the potential for
recyclables that could be sorted for potential sale, including tires, cardboard, high grad
paper, newsprint, aluminum, ferrous metal, glass, hard plastic, film plastic, etc. Provide
as much detail in the process flow diagram as possible, as the assessment of revenues will
subsequently be based on the individual market prices available for each item.
Task 2
Obtain pricing information from various local sources and also international buyers on
the possible recyclables products. For the compost product options, discuss market needs
of various types of farmers, including those producing tea and coffee, sugar cane, fruit
trees, horticulture, oil seeds, and vegetables, as well as grains and various extensive crops
such as rice. Determine whether there are specific needs of organic farmers, and whether
a compost product could be created to match those needs enabling organic certification
for export. This work will include determining, for a radius of 150 km, the surface area
in production for each major type of crop and the normal application rates used for
organic soil amendment. Also examine whether there is land in need of reclamation with
organic soil amendment, due to salinity, impermeability, or other problem hindering good
crop usage. For this land, determine the potential crop type that could be planted if
reclaimed and the reclamation period and dosage required to convert the land to crop
usage. Based on a full assessment of the region of study, determine total potential
revenues from the proposed facility and operation.
Task 3
Examine the quantity, availability, condition and price of all competing organic soil
amendment products, including all livestock animal wastes, agricultural residues that are
suitable for soil application, treated sewage sludge, etc. Also, examine the cost of
chemical fertilizer and the potential to create an enhanced compost that would have
amended NPK and other nutrients or constituents for soil improvement. Further consider
the potential of adding enzymes and soil micro-organisms for enhancement. Based on
consideration of this study of competing products, particularly competing manures,
provide an evaluation of viable pricing for the potential compost products.
Task 4
After determination of the key potential markets for compost products, conduct
willingness to pay surveys with farmers and consumers within those key markets.
Discuss preferences, biases, perceptions of potential purchases to determine whether and
how the market demand needs to be developed, or already exists adequately to sustain the
proposed facilities financial needs. If the market needs to be developed, outline a
demonstration strategy that would provide compost product to demo farms for illustration
of crop yield and quality improvement from various rates of compost application.
Task 5
Based on the above, develop and report summarizing all findings and conclusions, and
providing a strategy for market development of the various potential compost products.
Milestones
Task 1 - 2 weeks
Task 2 – 4 weeks
Task 3 – same 4 weeks as Task 2, in parallel by another team member
Task 4 – 2 weeks
Task 5 – 2 weeks
Team
Agricultural economists with experience in crop production and soil amendment.
Schedule