Rice Economics

[Greenside]

My wife owns a small farm of 28 rai south of Surin. Until recently it was rented out to a neighbour but the lease has recently ended on half of it and the balance will be available next year. We live in Chiang Mai and her brother (who has very limited farming experience as far as I can tell) wants to grow rice this year and maybe biofuel on the other part next year as that's what the tenant has planted now. Naturally, he has no capital to fund the crop as her father, when he was alive, used to borrow from the good old Bank Farm.

Could someone please point me in the right direction for a guide on input costs and the possible income per rai. I'm trying to get my wife to view the farm as an asset that should produce an income if not for us then at least for her brother and while I'm prepared to put in the money to plant and feed the rice this season, we intend to treat it as a loan rather than a gift so that he can get on his feet for next year and hopefully even pay her some rent one day (although I'll believe that when I see it!).

His claims as to the cash that is needed vary (depending on whether he's run out of drink supplies, I suspect) so I'm looking for something to use as a rough guide but broken down into stages: preparation, seed & planting, fertilizing, harvesting. Any help would be much appreciated.

[pnustedt]

I'm looking for something to use as a rough guide but broken down into stages: preparation, seed & planting, fertilizing, harvesting. Any help would be much appreciated.

Most rice is already sewn in Surin so time is getting a bit short for this year's harvest. Immediately the ground needs to be cleared (usually with a chemical weedkiller), the rice sewn and ploughed in a week later. Ploughing is about Bt250/rai, total weedkiller say Bt2,500, not sure about rice seed (if it is needed or use last year's crop) say Bt4,000 plus starter fertilizer, say another Bt4,000. Immediate outlay, say Bt16,500.

Fertiliser will be needed in October, say Bt20,000 at today's prices, plus herbicide, say Bt2,000.

Harvest by machine in November, expect cost in excess of Bt700/rai, say Bt16,800. Total outlay to date on the 24 rai say Bt54,500.

Income in November (assuming farm gate price of rice at Bt16/kilo) say Bt90,000.

Obviously there are a lot of variables, not least dependancy on the weather, soil conditions and market prices. Corners can cut, e.g. use less or cheaper fertilisers, harvest by hand, etc. but yields may be less as a result. Note that if the price of rice drops to last years' level (about Bt9/kilo) you would make a loss!

[Greenside]

Thanks very much, that's just the kind of summary I was looking for. In fact I've already paid up for the plowing and preparation (250 bht/rai, as you said) and the seed is on hand so perhaps he's only a little behind now. My wife thinks the input can be kept below your estimate but at least I have an idea of what to expect.

The economics make gloomy reading for small farmers and I can see why so many people in her village quit the countryside for at least part of the year. It must be getting very difficult for many people to makes ends meet in the face of rocketing food and fuel costs. Looks to me that anything under about 100 rai isn't worth planting for an income.

Does anyone know the going rate for renting out land capeable of supporting one rice or biofuel crop per year?

[DCasper]

My Wifes Mother has about 20 rai of family farm in udon only good for one harvest a year. Only used for the household for a year. Seems like a lot of land and work for rice for a year.

[Issangeorge]

DCasper, that seems to be the story of most Isaan farmers, they only grow enough to feed themselves, no cash crops. The lucky ones with irrigated land may get a second cash crop, but even then after expenses there is not much cash left. If the price of cassava stays up this may all change, especially if the stories of yields up to 30 tonne per rai are true, heck if they only get 15 tonne per ride at prices over ฿2,000 per rai that is still a good income after expenses. Issangeorge.

[fruity]

Looks to me that anything under about 100 rai isn't worth planting for an income.

Does anyone know the going rate for renting out land capeable of supporting one rice or biofuel crop per year.

In our neck of the woods in Buriram, the going rate for renting land for growing rice is paid for in 99% of cases with a percentage of the crop, usually, 20 or 25%. You get 120 bags, you give the land owner 30 bags. I imagine, the situation in Surin to be similar.

There are so many variables, however, this year, with a modicum of 'luck' people should make decent money from rice for the first time in a long time. The price will not fall, in fact, it could increase slightly, yes, fertilisers & diesel are all sky rocketing, but the ratio of fertiliser to land area remains the same & the rice is worth twice the money at the end, so people should do ok.

My wife is doing 56 rai of rice this year & expects to NET 200k minimum from this after exs.

[Issangeorge]

In my area rice land if you can buy it is going for at least ฿40,000 a rai, so that means that a ฿200,000 profit on 56 rai would be just under 10%. Better than the banks would give you, and a lot better than previous years, but still not very good when you take into mind the risk and all the hard work. Issangeorge

[IsaanAussie]

I'm looking for something to use as a rough guide but broken down into stages: preparation, seed & planting, fertilizing, harvesting. Any help would be much appreciated.

Most rice is already sewn in Surin so time is getting a bit short for this year's harvest. Immediately the ground needs to be cleared (usually with a chemical weedkiller), the rice sewn and ploughed in a week later. Ploughing is about Bt250/rai, total weedkiller say Bt2,500, not sure about rice seed (if it is needed or use last year's crop) say Bt4,000 plus starter fertilizer, say another Bt4,000. Immediate outlay, say Bt16,500.

Fertiliser will be needed in October, say Bt20,000 at today's prices, plus herbicide, say Bt2,000.

Harvest by machine in November, expect cost in excess of Bt700/rai, say Bt16,800. Total outlay to date on the 24 rai say Bt54,500.

Income in November (assuming farm gate price of rice at Bt16/kilo) say Bt90,000.

Obviously there are a lot of variables, not least dependancy on the weather, soil conditions and market prices. Corners can cut, e.g. use less or cheaper fertilisers, harvest by hand, etc. but yields may be less as a result. Note that if the price of rice drops to last years' level (about Bt9/kilo) you would make a loss!

PN,

Firstly thanks for all you help last week.

I agree with your calculations and note that the yield would be about 400Kgs per rai. Not bad. We get about 450 Kgs off "good" land but only 300-350 of what I call rough land.

For anyone looking to start off, ask two simple questions. How many rai? and How many bags of rice? From this calculate income by assuming between 45-50 kg per bag. Thais I talk to do not understand tonnages. Look at the land, if it has tree covered mounds and the paddy walls are not in good shape, the yield will be down. Rice doesn't grow well under trees. Uneven land, poor water distribution, low yield. Broken walls, fertiliser gone downstream.

We have a 12 Rai block which I call "good" land. It was valued at 20,000 per rai when we got it (2002) and it was rough. We removed over 100 trees (wood sawn to housing type sizes) cost 7,500 Baht. The mounds flattened out and earth walls repaired 75,000 Baht.

If you are thinking of buying land then look at the cost of redeveloping as well as buying cleared land. If your yield can be increased by 50 to 100 bags as ours was then the clearing costs can be recouped quickly. In my example at todays prices (PN's 16Baht/kg) 50 bags at 45Kgs/bag is 36,000Baht difference per rai.

Another advantage of clearing is you can include ponds which will let you grow fish and water second and third crops. For those looking at biodiesel, sunflowers and other oil crops can be grown outside rice season if you have the water. From my research sunflowers should yield 125 Litres per Rai.

[IsaanAussie]

Correction to previous post

If you are thinking of buying land then look at the cost of redeveloping as well as buying cleared land. If your yield can be increased by 50 to 100 bags as ours was then the clearing costs can be recouped quickly. In my example at todays prices (PN's 16Baht/kg) 50 bags at 45Kgs/bag is 36,000Baht difference per rai.

Sorry about that, wish it was that good. I meant for the block of 12 Rai. That is 3,000 baht per rai difference in purchase price can be recouped in a single crop.