Just Bought 150 Rai In Kampaengphet

[Nepal4me]

My wife and I just bought 150 rai (Saw bpaw gaw) in Kampaengphet. My wife's family will grow mansambpalang and will also start to grow rubber trees.

My thought process on this as follows:

-The land will increase in value over time and at a purchase price of 15,000 baht/rai, it's pretty cheap. Total 2.25M Bt.

-According to the Aw bpaw dtaw, the land will be upgraded to chanote within 2 years. (I'll believe that when I see it and really I’m not that concerned about whether it's Saw bpaw gaw or chanote other than hopefully in the long run 20+years, it'll be chanote).

-My wife's family can make a very good income growing mansabpalang and whatever else in between the rubber trees for the first 2 or 3 years. My wife will take 50% of the net and her family will get the other 50%.

-Our 50% will be put towards the costs for setting up the rubber trees. I'm sure my financial requirement will be much more than that and I’m not even really considering this income.

-The land is in my wife's name and this gives her family a sense of security as this is a gigantic asset to a typical Thai chonabot family such as hers.

-We have 2 children and this will be an asset for them for the future no matter what happens to me or my financial situation.

The land we bought in KPP is very flat and is along a klong. The rainy season in KPP is roughly May to Nov so it's very long. I can build an irrigation system from the klong for the dry months so hopefully I can have a solid 9 month growing season and 6 years later, a 9 month tapping season. The land seems really ideal for rubber, very flat, lots of available water, good soil.

I have searched “rubber” on this forum and read many threads on the subject. Lots of great info available.

It seems that a producing RT plantation will generate around 250KG/rai/yr according to the official Thai stats that I found via the threads here. Maybe I can get more than 250KG/rai based on my land appearing to be very good but I'll go with 250 for my calculations. Rubber price 60 to 90 bt/KG.

250KG x 150 rai x 60bt/KG = 2.25MBt/yr.

If the rubber price is 90bt/KG then the return is much greater 3.375M Bt/yr.

There is a further gray area.

I don't know how much fertilizer will cost per rai. I understand it changes for the 1st, 2nd, 3rd year etc.

I don't know how much my irrigation system will cost. My land is quite square and one side is along the road and opposite is along a klong.

The 2.25M bt or 3.375M bt potential revenue will be minus fertilizer, plowing costs and a one time cost for irrigation installment and gas to power it (if I decide to do that) and a tractor (buy or rent??). Also energy cost for the irrigation system. I’ll pull a number out of the air here, average cost per year for all those expenses (averaging the one time costs in) 200K Bt/year. If somebody can provide a better estimate of the costs, I would really appreciate it.

After 6 years, my expenses will have been 200Kbt/yr x 6yrs = 1.2Mbt so my total investment goes from 2.25Mbt (land price) plus 1.2Mbt (expenses) = 3.45Mbt in pure baht spent.

6 years later my land will be generating 2.25Mbt/yr (if 60bt/KG) or 3.375Mbt (if 90bt/KG) before expenses. Then deducting expenses the total annual return is:

If 2.25Mbt – 100Mbt (fertilizer) – 50M pump cost = 2.1M – 40% for labour = 1.26M/yr

If 3.37Mbt – 100Mbt (fertilizer) – 50M pump cost = 3.22M – 40% for labour = 1.93M/yr

1.26Mbt/3.45Mbt = 36% annual return on investment - or if rubber is 90bt/KG

1.93Mbt/3.45Mbt = 56% annual ROI

That 36% to 56% annual return on my money would start in year 6 or 7. However, if the land has a value of 100,000bt per rai then my 150 rai would be 15M Bt. Fantastic 300% return in 6 years from my total investment price of 3.45Mbt. The 100K bt/rai price is arrived at because I think that is the price today per rai for producing RT land. Would be happy to hear if I’m off on this.

Ideally I will have the land tended to very well and after 6 years, I'll have a well managed plantation producing the maximum that can be produced from that land. After that, I would hope to keep the land and work it and reap the financial benefits for many years. The other option is to sell the land or part of the land. You would have to presume that the land will go up in value. Hopefully it'll be chanot, the road will be paved and there will be RT's ready to start producing. What does that equal??? 100,000 bt/rai. I’m really not sure.

Personally, this is not a significant asset for me so if I lost the whole thing, it really wouldn’t mean anything other than being a piss off. It is simply a way to help my wife’s family out, ensure my children have an asset in Thailand and if it generates 1 or 2M bt per year for me, then that’s a nice bonus. I already have put away money for my kids education so it’s not a critical issue for me monetarily.

If anybody wants to take the time to read through this and make comments, I would welcome them.

Thanks…

[chiang mai]

My wife and I just bought 150 rai (Saw bpaw gaw) in Kampaengphet. My wife's family will grow mansambpalang and will also start to grow rubber trees.

My thought process on this as follows:

-The land will increase in value over time and at a purchase price of 15,000 baht/rai, it's pretty cheap. Total 2.25M Bt.

-According to the Aw bpaw dtaw, the land will be upgraded to chanote within 2 years. (I'll believe that when I see it and really I’m not that concerned about whether it's Saw bpaw gaw or chanote other than hopefully in the long run 20+years, it'll be chanote).

-My wife's family can make a very good income growing mansabpalang and whatever else in between the rubber trees for the first 2 or 3 years. My wife will take 50% of the net and her family will get the other 50%.

-Our 50% will be put towards the costs for setting up the rubber trees. I'm sure my financial requirement will be much more than that and I’m not even really considering this income.

-The land is in my wife's name and this gives her family a sense of security as this is a gigantic asset to a typical Thai chonabot family such as hers.

-We have 2 children and this will be an asset for them for the future no matter what happens to me or my financial situation.

The land we bought in KPP is very flat and is along a klong. The rainy season in KPP is roughly May to Nov so it's very long. I can build an irrigation system from the klong for the dry months so hopefully I can have a solid 9 month growing season and 6 years later, a 9 month tapping season. The land seems really ideal for rubber, very flat, lots of available water, good soil.

I have searched “rubber” on this forum and read many threads on the subject. Lots of great info available.

It seems that a producing RT plantation will generate around 250KG/rai/yr according to the official Thai stats that I found via the threads here. Maybe I can get more than 250KG/rai based on my land appearing to be very good but I'll go with 250 for my calculations. Rubber price 60 to 90 bt/KG.

250KG x 150 rai x 60bt/KG = 2.25MBt/yr.

If the rubber price is 90bt/KG then the return is much greater 3.375M Bt/yr.

There is a further gray area.

I don't know how much fertilizer will cost per rai. I understand it changes for the 1st, 2nd, 3rd year etc.

I don't know how much my irrigation system will cost. My land is quite square and one side is along the road and opposite is along a klong.

The 2.25M bt or 3.375M bt potential revenue will be minus fertilizer, plowing costs and a one time cost for irrigation installment and gas to power it (if I decide to do that) and a tractor (buy or rent??). Also energy cost for the irrigation system. I’ll pull a number out of the air here, average cost per year for all those expenses (averaging the one time costs in) 200K Bt/year. If somebody can provide a better estimate of the costs, I would really appreciate it.

After 6 years, my expenses will have been 200Kbt/yr x 6yrs = 1.2Mbt so my total investment goes from 2.25Mbt (land price) plus 1.2Mbt (expenses) = 3.45Mbt in pure baht spent.

6 years later my land will be generating 2.25Mbt/yr (if 60bt/KG) or 3.375Mbt (if 90bt/KG) before expenses. Then deducting expenses the total annual return is:

If 2.25Mbt – 100Mbt (fertilizer) – 50M pump cost = 2.1M – 40% for labour = 1.26M/yr

If 3.37Mbt – 100Mbt (fertilizer) – 50M pump cost = 3.22M – 40% for labour = 1.93M/yr

1.26Mbt/3.45Mbt = 36% annual return on investment - or if rubber is 90bt/KG

1.93Mbt/3.45Mbt = 56% annual ROI

That 36% to 56% annual return on my money would start in year 6 or 7. However, if the land has a value of 100,000bt per rai then my 150 rai would be 15M Bt. Fantastic 300% return in 6 years from my total investment price of 3.45Mbt. The 100K bt/rai price is arrived at because I think that is the price today per rai for producing RT land. Would be happy to hear if I’m off on this.

Ideally I will have the land tended to very well and after 6 years, I'll have a well managed plantation producing the maximum that can be produced from that land. After that, I would hope to keep the land and work it and reap the financial benefits for many years. The other option is to sell the land or part of the land. You would have to presume that the land will go up in value. Hopefully it'll be chanot, the road will be paved and there will be RT's ready to start producing. What does that equal??? 100,000 bt/rai. I’m really not sure.

Personally, this is not a significant asset for me so if I lost the whole thing, it really wouldn’t mean anything other than being a piss off. It is simply a way to help my wife’s family out, ensure my children have an asset in Thailand and if it generates 1 or 2M bt per year for me, then that’s a nice bonus. I already have put away money for my kids education so it’s not a critical issue for me monetarily.

If anybody wants to take the time to read through this and make comments, I would welcome them.

Thanks…

If you refer to Saw bpaw gaw land then by it's very definition it cannot be sold hence you should check with the Land Office as to whether you have really bought it or not - be prepared for a shock? Assuming you have:

I haven't looked through your numbers because I'm too lazy but if you wanted to put them into a spreadsheet and do a payback analysis I would happily comment. My initial thoughts on this are what you might expect although they are not covered explicitly in your post: 1) Land ownership is in your wife's name not yours so there is a business risk there which I hope you are comfortable with. 2) Kampaengphet is quite far North and subject to climate variations, I used to live in Chiang Mai for many years so I know this to be the case. I currently live in the South in the middle of Rubber Country. Actually, I cannot recall ever having seen rubber plantations as far North as Kampaengphet - are you absolutely certain this is viable from a growing perspective and I refer to temperature and not irrigation?

Edited November 27, 2007 by chiang mai

[JimmyTheMook]

2) Kampaengphet is quite far North and subject to climate variations, I used to live in Chiang Mai for many years so I know this to be the case. I currently live in the South in the middle of Rubber Country. Actually, I cannot recall ever having seen rubber plantations as far North as Kampaengphet - are you absolutely certain this is viable from a growing perspective and I refer to temperature and not irrigation?

Interesting point.

Land is always considered an asset and that sure sounds like a good sized plot.

[stoneman]

There are quite a few other costs associated with this that you have not included...The rubber trees themselves will cost you about 15 baht each for the better quality and an additional 5 to 7 baht each to get them into the ground...And that fertilizer has to be spread by hand and 150 rai and I think will require more hands than you have relatives, so you are looking at additional labor costs... During the production cycle, one person can handle the collection from about 600 to 700 trees...So it can get labor intensive

And when you start production you will have some significant start up costs to buy the necessary equipment and build the required facilities...processing shed and smokehouse. Also, unless you have a very large family, you will have to hire labor to gather the latex and to process it. It is not unusual for this cost to amount to 35 - 40% of your total proceeds from the latex sales...We have also installed installed a drip irrigation system for the 1,000 younger trees and 51 avocado trees that will start producing next year...

We have 2,000 rubber trees, of which 1,000 will begin production in about 18 months..I agree that there is decent money to be made, but it is a lot of hard work and you have your money invested for 7 years before the return starts and a lot of bad things can happen in 7 years... But with the price of synthetic rubber now at over 150 baht per kg, there will be an increasing demand for latex and the higher the oil price goes , the higher the latex price will go...

[Nepal4me]

If you refer to Saw bpaw gaw land then by it's very definition it cannot be sold hence you should check with the Land Office as to whether you have really bought it or not - be prepared for a shock? Assuming you have:

I haven't looked through your numbers because I'm too lazy but if you wanted to put them into a spreadsheet and do a payback analysis I would happily comment. My initial thoughts on this are what you might expect although they are not covered explicitly in your post: 1) Land ownership is in your wife's name not yours so there is a business risk there which I hope you are comfortable with. 2) Kampaengphet is quite far North and subject to climate variations, I used to live in Chiang Mai for many years so I know this to be the case. I currently live in the South in the middle of Rubber Country. Actually, I cannot recall ever having seen rubber plantations as far North as Kampaengphet - are you absolutely certain this is viable from a growing perspective and I refer to temperature and not irrigation?

Chiang Mai. I do understand the buying and selling aspects of saw bpaw gaw. However it does change hands and it's "wink and a nod" kind of arrangement. We hold the "paper" and we will be paying the tax. As mentioned, if I lose it all, it's not a biggie. That goes for the biz risk of my wife's name too. No biggie, she's the mother of my kids so whatever happens, I want her to be financially viable.

I haven't got to the spreadsheet stage but I will definitely do that and will send to you.

There are a number of rubber plantations in the KPP area although none as yet producing ... that I have seen. KPP is half way between ChiangMai and BKK so I'm not sure what that does to the temp variation. However, Nong Khai has piles of rubber plantations that are producing and that's way north of KPP.

Anyway the weather is typical Thai hot season, rainy season and dam_n hot season. The rainy season is long compared to Issan or BKK.

There are quite a few other costs associated with this that you have not included...The rubber trees themselves will cost you about 15 baht each for the better quality and an additional 5 to 7 baht each to get them into the ground...And that fertilizer has to be spread by hand and 150 rai and I think will require more hands than you have relatives, so you are looking at additional labor costs... During the production cycle, one person can handle the collection from about 600 to 700 trees...So it can get labor intensive

And when you start production you will have some significant start up costs to buy the necessary equipment and build the required facilities...processing shed and smokehouse. Also, unless you have a very large family, you will have to hire labor to gather the latex and to process it. It is not unusual for this cost to amount to 35 - 40% of your total proceeds from the latex sales...We have also installed installed a drip irrigation system for the 1,000 younger trees and 51 avocado trees that will start producing next year...

We have 2,000 rubber trees, of which 1,000 will begin production in about 18 months..I agree that there is decent money to be made, but it is a lot of hard work and you have your money invested for 7 years before the return starts and a lot of bad things can happen in 7 years... But with the price of synthetic rubber now at over 150 baht per kg, there will be an increasing demand for latex and the higher the oil price goes , the higher the latex price will go...

You're right I didn't include the 15 bt per tree and the planting. Sorry just forgot about that as I wrote my post. I didn't break out fertilizer cost from spreading fertilizer cost but really just ball parked as I don't know the cost. Would be very interested in more detail on what fertilizer will cost per rai and the time it would take to spead it over 150 rai.

Again, good point in not mentioning cost for processing shed and smokehouse. That is very relevant. Could you comment on what that might cost?

BTW, I really don't know what a drip irrigation system is. Can you point me to a description on the web anywhere?

In your area, what would the price per rai be for a RT planation that is just at the starting to produce stage???

Thanks for your input.

[keg]

Nepal4me,

You speak of the land title as being Saw Bpaw Gaw land which I am not sure of what it is. Since it is a large tract of land it would be interesting to know what type title it has. Even though the law can say one thing I do understand that anything can actually take place. Although I am not an expert nor claim to be the following is what I know of the different land titles:

As mentioned in your post, Chanote is the top land title and gives full ownership rights to the owner and has an accurate survey with boundary markers. This is the only true land ownership document.

Next is Nor Sor 3 and Nor Sor 3 Kor - This land can be bought and sold and gives the possessor most rights associated with ownership. The difference in the two is how accurate the survey is. Nor Sor 3 Kor has an accurate survey with boundary markers where Nor Sor 3 has a survey but no boundary markers which could lead to disputes with neighbors.

Next is Sor Por Kor - This is land that is allotted by and overseen by the land reform committee. This land has an accurate survey and defined boundaries. The difference with this land is that the possessor can only pass this land down to legal heirs and it can not be bought or sold. I believe that a large portion of rural Issan farm land is of this type of title. The intent is that the land stay in the family and not be bought up by rich land speculators. One recent change to this type of land is that it can be used for loan purposes now through the farming cooperatives bank. Each person is allowed only 50 rai each of this type of land.

Next is Por Bor Tor 5 - This land is either farm or forest land not under ownership or control of the land office. This land is administered by a local village leader who oversees possession rights and boundaries. Sales are carried out under the supervision of this village leader and recorded locally only. This land can’t be built upon.

Por Bor Tor 6 - This is a document issued for all land so that it can be assessed for taxes.

Next is Sor Kor 1 - This entitles the possessor to occupy the land and farm it only. It can’t be built upon. It can’t be sold but only transferred to heirs. This is the basic squatters rights document. After long term occupation, application can be made to upgrade title. This application can only be made by the long term possessor. Most Sor Kor 1 land has already been upgraded to Nor Sor 3 land.

Are one of these the title you speak of as Saw Bpaw Gaw? Buying and selling of all this type of land happens all the time in thailand even the prime minister is involved with an issue of building a house on land that was not supposed to be sold nor built on. Sounds like you got a pretty good deal on the land and hope everything works out with the farm. Keep us updated on the progress.

Keg

Edited November 28, 2007 by keg

[billd766]

Whereabouts in Khampaeng Phet is your land as I live in Klong Lan Pattana about 65 km southwest of Khampaeng Phet?

[thaipete]

My wife and I just bought 150 rai (Saw bpaw gaw) in Kampaengphet. My wife's family will grow mansambpalang and will also start to grow rubber trees.

My thought process on this as follows:

-The land will increase in value over time and at a purchase price of 15,000 baht/rai, it's pretty cheap. Total 2.25M Bt.

-According to the Aw bpaw dtaw, the land will be upgraded to chanote within 2 years. (I'll believe that when I see it and really I'm not that concerned about whether it's Saw bpaw gaw or chanote other than hopefully in the long run 20+years, it'll be chanote).

-My wife's family can make a very good income growing mansabpalang and whatever else in between the rubber trees for the first 2 or 3 years. My wife will take 50% of the net and her family will get the other 50%.

-Our 50% will be put towards the costs for setting up the rubber trees. I'm sure my financial requirement will be much more than that and I'm not even really considering this income.

-The land is in my wife's name and this gives her family a sense of security as this is a gigantic asset to a typical Thai chonabot family such as hers.

-We have 2 children and this will be an asset for them for the future no matter what happens to me or my financial situation.

The land we bought in KPP is very flat and is along a klong. The rainy season in KPP is roughly May to Nov so it's very long. I can build an irrigation system from the klong for the dry months so hopefully I can have a solid 9 month growing season and 6 years later, a 9 month tapping season. The land seems really ideal for rubber, very flat, lots of available water, good soil.

I have searched "rubber" on this forum and read many threads on the subject. Lots of great info available.

It seems that a producing RT plantation will generate around 250KG/rai/yr according to the official Thai stats that I found via the threads here. Maybe I can get more than 250KG/rai based on my land appearing to be very good but I'll go with 250 for my calculations. Rubber price 60 to 90 bt/KG.

250KG x 150 rai x 60bt/KG = 2.25MBt/yr.

If the rubber price is 90bt/KG then the return is much greater 3.375M Bt/yr.

There is a further gray area.

I don't know how much fertilizer will cost per rai. I understand it changes for the 1st, 2nd, 3rd year etc.

I don't know how much my irrigation system will cost. My land is quite square and one side is along the road and opposite is along a klong.

The 2.25M bt or 3.375M bt potential revenue will be minus fertilizer, plowing costs and a one time cost for irrigation installment and gas to power it (if I decide to do that) and a tractor (buy or rent??). Also energy cost for the irrigation system. I'll pull a number out of the air here, average cost per year for all those expenses (averaging the one time costs in) 200K Bt/year. If somebody can provide a better estimate of the costs, I would really appreciate it.

After 6 years, my expenses will have been 200Kbt/yr x 6yrs = 1.2Mbt so my total investment goes from 2.25Mbt (land price) plus 1.2Mbt (expenses) = 3.45Mbt in pure baht spent.

6 years later my land will be generating 2.25Mbt/yr (if 60bt/KG) or 3.375Mbt (if 90bt/KG) before expenses. Then deducting expenses the total annual return is:

If 2.25Mbt – 100Mbt (fertilizer) – 50M pump cost = 2.1M – 40% for labour = 1.26M/yr

If 3.37Mbt – 100Mbt (fertilizer) – 50M pump cost = 3.22M – 40% for labour = 1.93M/yr

1.26Mbt/3.45Mbt = 36% annual return on investment - or if rubber is 90bt/KG

1.93Mbt/3.45Mbt = 56% annual ROI

That 36% to 56% annual return on my money would start in year 6 or 7. However, if the land has a value of 100,000bt per rai then my 150 rai would be 15M Bt. Fantastic 300% return in 6 years from my total investment price of 3.45Mbt. The 100K bt/rai price is arrived at because I think that is the price today per rai for producing RT land. Would be happy to hear if I'm off on this.

Ideally I will have the land tended to very well and after 6 years, I'll have a well managed plantation producing the maximum that can be produced from that land. After that, I would hope to keep the land and work it and reap the financial benefits for many years. The other option is to sell the land or part of the land. You would have to presume that the land will go up in value. Hopefully it'll be chanot, the road will be paved and there will be RT's ready to start producing. What does that equal??? 100,000 bt/rai. I'm really not sure.

Personally, this is not a significant asset for me so if I lost the whole thing, it really wouldn't mean anything other than being a piss off. It is simply a way to help my wife's family out, ensure my children have an asset in Thailand and if it generates 1 or 2M bt per year for me, then that's a nice bonus. I already have put away money for my kids education so it's not a critical issue for me monetarily.

If anybody wants to take the time to read through this and make comments, I would welcome them.

Thanks…

I wish I could get somewhere near 90B per Kg, untreated rubber except for formic runs at 20-40B per kilo, treated and pressed into sheets which is quite a process the normal selling rate is about 70B at todays prices (untreated 30B yesterday).

Modern variations of rubber trees can generally be tapped after 4-5 years, I put a sprinkler system on mine which is expensive initially but cheap for usage, I put a large Lister Diesel on a local government reservoir so is cheap to run and not used that often but with the recent dry spell we are getting a better yield than the neighbouring farms.

The main worry with the tappers is knowing their ability and honesty, luckily my ex and family are trustworthy, the normal split is 60:40 % owner to tappers and the owner buys all, fertiliser, formic, weed cutting etc, and other materials do not really make much of dent in the income once the trees are established.

Your estimates for fertiliser, if solely for the rubber is way over the top, you need to have a tractor in sometimes about every 3 months to cut the weeds, as continual spraying with weed killer harms the trees.

Also during the first few years of the trees maturing period you can grow various other crops such as pineapple or tapioca between the trees. I can find out the exact costs for you but I doubt the fertiliser will cost 20,000B pa for the rubber alone, weeding perhaps 6,000 I presume you family will do the pruning etc when and as necessary

[thaipete]

I am not sure it would be viable on 150 Rai for you to process your own latex, it is very time consuming and labour intensive, although you get twice the price for the finished product by the time you deduct the labour chemicals etc.

I have about 35 rai, 30 of which has trees that are fully mature and with the different sale prices I thought to do the same but after checking prices and talking to local growers the only way to make it viable would to but in extra latex from other farms and process that too it is also all likely to be ruined with a sudden downpour during drying

[Nepal4me]

Nepal4me,

You speak of the land title as being Saw Bpaw Gaw land which I am not sure of what it is. Since it is a large tract of land it would be interesting to know what type title it has. Even though the law can say one thing I do understand that anything can actually take place. Although I am not an expert nor claim to be the following is what I know of the different land titles:

Are one of these the title you speak of as Saw Bpaw Gaw? Buying and selling of all this type of land happens all the time in thailand even the prime minister is involved with an issue of building a house on land that was not supposed to be sold nor built on. Sounds like you got a pretty good deal on the land and hope everything works out with the farm. Keep us updated on the progress.

Keg

Hi Keg,

Yes, the Saw pbaw gaw that I refer to would be the Sor Por Kor. I didn't know the real name so I just went by phonetics.

Thanks very much for the break down of land types. That was very informative.

I wish I could get somewhere near 90B per Kg, untreated rubber except for formic runs at 20-40B per kilo, treated and pressed into sheets which is quite a process the normal selling rate is about 70B at todays prices (untreated 30B yesterday).

Modern variations of rubber trees can generally be tapped after 4-5 years, I put a sprinkler system on mine which is expensive initially but cheap for usage, I put a large Lister Diesel on a local government reservoir so is cheap to run and not used that often but with the recent dry spell we are getting a better yield than the neighbouring farms.

The main worry with the tappers is knowing their ability and honesty, luckily my ex and family are trustworthy, the normal split is 60:40 % owner to tappers and the owner buys all, fertiliser, formic, weed cutting etc, and other materials do not really make much of dent in the income once the trees are established.

Your estimates for fertiliser, if solely for the rubber is way over the top, you need to have a tractor in sometimes about every 3 months to cut the weeds, as continual spraying with weed killer harms the trees.

Also during the first few years of the trees maturing period you can grow various other crops such as pineapple or tapioca between the trees. I can find out the exact costs for you but I doubt the fertiliser will cost 20,000B pa for the rubber alone, weeding perhaps 6,000 I presume you family will do the pruning etc when and as necessary

I think my wife's family is quite honest and yes they will do a lot of the work, fertilizing, pruning, weeding. Glad to hear my estimates for fertilizer is high but I'm sure there will be other expenses involved to make up for it. :-)

I wonder if anybody has a spead sheet for the whole process. There are so many variables and I have started an excel sheet to put the costs in perspective and potential returns 6 odd years later but I'm still at the stage of trying to get my head around all the costs and am nowhere close to being able to build an accurate spread sheet.

Does anybody have spreadsheet showing annual and one time expenses and potential returns over a number of years? Obviously everybody's plantation will be unique but the spreadsheet could be modifed per each person. So if somebody has one, please share it or PM me.

Another question is: What is the going rate for a rai of producing RT's? It would be interesting to hear the px/rai in the south, in Isaan and elsewhere. Wonder if my 100,000 ba/rai is accurate or not???

Thanks

[maccaroni man]

My wife and I just bought 150 rai (Saw bpaw gaw) in Kampaengphet. My wife's family will grow mansambpalang and will also start to grow rubber trees.

My thought process on this as follows:

-The land will increase in value over time and at a purchase price of 15,000 baht/rai, it's pretty cheap. Total 2.25M Bt.

-According to the Aw bpaw dtaw, the land will be upgraded to chanote within 2 years. (I'll believe that when I see it and really I’m not that concerned about whether it's Saw bpaw gaw or chanote other than hopefully in the long run 20+years, it'll be chanote).

-My wife's family can make a very good income growing mansabpalang and whatever else in between the rubber trees for the first 2 or 3 years. My wife will take 50% of the net and her family will get the other 50%.

-Our 50% will be put towards the costs for setting up the rubber trees. I'm sure my financial requirement will be much more than that and I’m not even really considering this income.

-The land is in my wife's name and this gives her family a sense of security as this is a gigantic asset to a typical Thai chonabot family such as hers.

-We have 2 children and this will be an asset for them for the future no matter what happens to me or my financial situation.

The land we bought in KPP is very flat and is along a klong. The rainy season in KPP is roughly May to Nov so it's very long. I can build an irrigation system from the klong for the dry months so hopefully I can have a solid 9 month growing season and 6 years later, a 9 month tapping season. The land seems really ideal for rubber, very flat, lots of available water, good soil.

I have searched “rubber” on this forum and read many threads on the subject. Lots of great info available.

It seems that a producing RT plantation will generate around 250KG/rai/yr according to the official Thai stats that I found via the threads here. Maybe I can get more than 250KG/rai based on my land appearing to be very good but I'll go with 250 for my calculations. Rubber price 60 to 90 bt/KG.

250KG x 150 rai x 60bt/KG = 2.25MBt/yr.

If the rubber price is 90bt/KG then the return is much greater 3.375M Bt/yr.

There is a further gray area.

I don't know how much fertilizer will cost per rai. I understand it changes for the 1st, 2nd, 3rd year etc.

I don't know how much my irrigation system will cost. My land is quite square and one side is along the road and opposite is along a klong.

The 2.25M bt or 3.375M bt potential revenue will be minus fertilizer, plowing costs and a one time cost for irrigation installment and gas to power it (if I decide to do that) and a tractor (buy or rent??). Also energy cost for the irrigation system. I’ll pull a number out of the air here, average cost per year for all those expenses (averaging the one time costs in) 200K Bt/year. If somebody can provide a better estimate of the costs, I would really appreciate it.

After 6 years, my expenses will have been 200Kbt/yr x 6yrs = 1.2Mbt so my total investment goes from 2.25Mbt (land price) plus 1.2Mbt (expenses) = 3.45Mbt in pure baht spent.

6 years later my land will be generating 2.25Mbt/yr (if 60bt/KG) or 3.375Mbt (if 90bt/KG) before expenses. Then deducting expenses the total annual return is:

If 2.25Mbt – 100Mbt (fertilizer) – 50M pump cost = 2.1M – 40% for labour = 1.26M/yr

If 3.37Mbt – 100Mbt (fertilizer) – 50M pump cost = 3.22M – 40% for labour = 1.93M/yr

1.26Mbt/3.45Mbt = 36% annual return on investment - or if rubber is 90bt/KG

1.93Mbt/3.45Mbt = 56% annual ROI

That 36% to 56% annual return on my money would start in year 6 or 7. However, if the land has a value of 100,000bt per rai then my 150 rai would be 15M Bt. Fantastic 300% return in 6 years from my total investment price of 3.45Mbt. The 100K bt/rai price is arrived at because I think that is the price today per rai for producing RT land. Would be happy to hear if I’m off on this.

Ideally I will have the land tended to very well and after 6 years, I'll have a well managed plantation producing the maximum that can be produced from that land. After that, I would hope to keep the land and work it and reap the financial benefits for many years. The other option is to sell the land or part of the land. You would have to presume that the land will go up in value. Hopefully it'll be chanot, the road will be paved and there will be RT's ready to start producing. What does that equal??? 100,000 bt/rai. I’m really not sure.

Personally, this is not a significant asset for me so if I lost the whole thing, it really wouldn’t mean anything other than being a piss off. It is simply a way to help my wife’s family out, ensure my children have an asset in Thailand and if it generates 1 or 2M bt per year for me, then that’s a nice bonus. I already have put away money for my kids education so it’s not a critical issue for me monetarily.

If anybody wants to take the time to read through this and make comments, I would welcome them.

Thanks…

If you refer to Saw bpaw gaw land then by it's very definition it cannot be sold hence you should check with the Land Office as to whether you have really bought it or not - be prepared for a shock? Assuming you have:

I haven't looked through your numbers because I'm too lazy but if you wanted to put them into a spreadsheet and do a payback analysis I would happily comment. My initial thoughts on this are what you might expect although they are not covered explicitly in your post: 1) Land ownership is in your wife's name not yours so there is a business risk there which I hope you are comfortable with. 2) Kampaengphet is quite far North and subject to climate variations, I used to live in Chiang Mai for many years so I know this to be the case. I currently live in the South in the middle of Rubber Country. Actually, I cannot recall ever having seen rubber plantations as far North as Kampaengphet - are you absolutely certain this is viable from a growing perspective and I refer to temperature and not irrigation?

We passed on an orange orchard for the same reason, of course the seller was telling us how we could upgrade the land title but it simply is not land that is meant for anything other than ag. we passed and a thai family we know took the deal; they have been bringing us oranges for about five years .......so i guess it worked out for them. As the op said it is not much cash and it is something for the family to do. good for you.

[technocracy]

As for the temperature comments earlier the one thing I can add (as I don't know bugger all else about rubber plantations!) is that there is plantation in northern Laos so I don't see any problems on that score!

[thaipete]

i have just checked approx 700 Baht per rai per year for fertilizer no variation per year

[jopham]

I am starting to see rubber plantations in Phitsanulok province.

There is one very close to the new airport it looks like about 250- 300 rai.

I do not know how far your are from (baan) Lan Krabu but there are are a few nurseries who sell rubber tree saplings.

I asume you can buy them anywhere?

Edited November 29, 2007 by jopham

[Mosha]

If this helps, my wife and her sister were talking. The sister in law turns the rubber in to the crude mats. she has 800 trees, and says she gets 3500/month. taking the 40% for the Burmese labour. About 2.6 Baht/tree This is here in Ranong. Although my wife later said she wasn't sure if it was per week or month.

Edited November 29, 2007 by Mosha

[Mosha]

It must be per week after working the maths. Also I must point out down here the rains can easily last 6 months.

[Nepal4me]

Rubber Tree expenses Annual/Semi Annual/One-Time

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

2008 2009 2010 2011 2012 2013 2014

Plowing land. - How long per rai?

Buying RT. - 15 ba/ RT

Planting RT - 150ba/day. - How many rai/day/person?

Buying Fertilizer. - baht/rai 700

Spreading Fertilizer. - 150 ba/day How many rai/day/person?

Grass cutting. - 150 ba/day

Watering system. - more info required

Gas for pump. -

Tapping. - How many RT/day/person?

Tractor. - Buy/rent?

Building for storage for 150 rai of rubber collected. -

Building for drying. -

chemicals. -

Value of land

Rubber price per KG

Latex price per KG

Rubber output/rai

I'm trying to put a spreadsheet together but so far there are far too many variables that I can't even guess at. Does anyone have a spreadsheet that they use that I can borrow and build upon?

Thanks,

[C-sip-degree]

Mr Nepal, Boy this spread is starting to add up!

Cannot knock you for trying and admire folks that grab the bull with both hands.

I’ve been trying for over a decade with farming in Isaan to make heads meet and still shake my head as reality sinks in.

“Will send you a box of Chang-light beer when you make your first dollar”

Your welcome to borrow this spread sheet.......

2.M (Baht) in the bank @ 5 percent.

Made a 100K for the year with-out visiting the farm.

Regards

C-sip

[Lickey]

I invested about 60k in our farm last year, new borehole and pump, tank and booster pump ect, lots of different fruit ect, and salad items, Mrs goes to farm early every morning, to sell stuff to local market and shops, and she tells me "have money come blah blah baht darling" ok, got money coming back and im sure investment is cleared now, but from the money pot, she takes to pay labour to clear weeds,buy and spread vitamins ect, pick fruit, now the better weather is here, i will spend more time on our hobby farm thus saving money on labour for menial tasks,

C-Sip, im sure i got my money back after last march, we were selling Papaya and salad items everyday for near 2500bht for 3 months, and my favorite beer is Chang Light!!! Cheers, Lickey..

[keg]

Nepal4me,

There was a guy awhile back with the post name SAP who was a farm manager for a large company in Nong Khai. I believe the company had 1500 rai and grew potatoes and corn. They used big center pivot irrigation systems and he was trying to sell the land that the irrigation system could not reach in 50 rai plots to grow rubber on. To make a long story short he had a quite extensive spread sheet worked out with all the costs broken down. I looked at some of his posts and could not find it but he had a note to PM for info. You can read some of his old posts where he talks about costs and try to PM him.

Keg

[Nepal4me]

Mr Nepal, Boy this spread is starting to add up!

“Will send you a box of Chang-light beer when you make your first dollar”

Your welcome to borrow this spread sheet.......

2.M (Baht) in the bank @ 5 percent.

Made a 100K for the year with-out visiting the farm.

Regards

C-sip

Excellent info C-sip. Your spread sheet is by far the best one so far recieved. I'll use it until something better comes along :-)

Looking forward to that case of Chang Light... altho it's not going to be for 6 years.

Nepal4me,

There was a guy awhile back with the post name SAP who was a farm manager for a large company in Nong Khai. I believe the company had 1500 rai and grew potatoes and corn. They used big center pivot irrigation systems and he was trying to sell the land that the irrigation system could not reach in 50 rai plots to grow rubber on. To make a long story short he had a quite extensive spread sheet worked out with all the costs broken down. I looked at some of his posts and could not find it but he had a note to PM for info. You can read some of his old posts where he talks about costs and try to PM him.

Keg

Keg, I did see Sap's posts before. I'll send him a PM. Thanks.

[thoongfoned]

hi,

heres my ten pences worth of info. sorry no spreed sheet.

my wife and i have two plots with rubber trees on them. one with 42 month old trees, second 18 month old trees. we have different planting patterns:3x6 and 3x4.

first off we had all the land cleared (trees/weeds) then ploughted loads of manure in and then had fences erected.

cant remmember how many people we had to plant trees but think to do around three and ahalf thousand trees in one plot took ten people four days. when people planted they also put all the vits and chemicals in.

clearing weeds/ fertilizer application one person can do approx one hundred and twenty squared metres a day. (depends on how dense weeds are) in the first 12 months we used the yarra brand of fertislizer as this was a quick release fertilizer, we used 100g per tree on first and second application in first 12 months. in the next year we changed brands to mosaic (this is a slower release) first and second application was 250g. at 24 months we use 300g/ 29 months 350g/ 41 months 450g/ 53 months 500g/ 65 months 550g through till tapping begins. we use these amounts because this is what is recommended with the mosaic fertilizer. the last time we bought fertilizer it was b710 per 50kg.

we pay people b160 a day plus food/drink. some times like this year we had around 70 people in one day just to clear weeds, we bought a cow and then devided it by 70. people here seem to prefer this pay ment more then cash!!?? (udon thani province) ploughing is b250 per rai.

every year we try to add extra manure by making a hole between the trees and filling it.

in the first year it is good to keep the weeds at bay, i think we weeded every month and once the trees were established we looked to prun every other week. on the first plot i have let the trees first branches to form at around 3.5m and on the second at around 2.5m. every tree is different but this is what i aimed for. the best trees that are 42 months are aprox 30cm all the way round and the 18 months are 20cm.

im no expert by any means, but this is what we do.

[Mosha]

What is your location?

[thoongfoned]

What is your location?

75km east of udon thani.

[Mosha]

We have a Burmese family working for us. We feed twice a year, we get a lot of rain 6-7 months pa. As to the spread sheet. SWMBO's son in law reckons on visiting 500 trees a day. Round here it's a 3 day work 1 day rest for the trees. we have 28 Rai of trees some 2150 trees. We are about 3 1/2 to 4 years from the 1st harvest.

[pointofview]

We have a Burmese family working for us. We feed twice a year, we get a lot of rain 6-7 months pa. As to the spread sheet. SWMBO's son in law reckons on visiting 500 trees a day. Round here it's a 3 day work 1 day rest for the trees. we have 28 Rai of trees some 2150 trees. We are about 3 1/2 to 4 years from the 1st harvest.

Very interiesting and informative thread. However, i think if you fead your burmese family more than twice a year you will see a great inprovement in their work rate

[Mosha]

We have a Burmese family working for us. We feed twice a year, we get a lot of rain 6-7 months pa. As to the spread sheet. SWMBO's son in law reckons on visiting 500 trees a day. Round here it's a 3 day work 1 day rest for the trees. we have 28 Rai of trees some 2150 trees. We are about 3 1/2 to 4 years from the 1st harvest.

Very interiesting and informative thread. However, i think if you fead your burmese family more than twice a year you will see a great inprovement in their work rate

Ah that's where we are going wrong. So if we feed the workers every day, and the trees twice a year, that should do it yes? You aren't a Tyke by any chance are you.

[guyshown]

Great thread- short of time right now but when I have more than a minute will throw in my experience over my 60 rai of RT

[GungaDin]

Great thread- short of time right now but when I have more than a minute will throw in my experience over my 60 rai of RT

Did you forget something?