How Can I Make Money In Rural Thailand /Isaan

[finner]

IssanAussie, it's a youtube video. Maybe you have to upgrade your flash player. Anyway here it is again:

youtube.com/watch?v=qR51U3K279g

except you have to add www. at the beginning or just copy it to google and search for it. It's a guy who sells DVDs (tractorengineer.com I think)to repair tractors but shows a shortened version here on how to take the pump apart for a yanmar.

[IsaanAussie]

I must say, I'm really impressed by the many excellent posts in this thread. This truly has been one of the most informative threads I have seen on TV!

Many thanks to all that have contributed such excellent information! :jap:

To the OP, I hope you understand just some of the pitfalls. You won't get rich, maybe you will just be able to survive. Only if you do a lot of study, learn quickly, work hard, commit to a huge amount of dedication, and take control. By all means get rid of those rose colored glasses. Of course the family will have all these great money making schemes that will drain your pocketbooks. Ask yourself, if there are all these great potentials to make it big, then why is Isaan one of the most impoverished areas of Thailand? Don't abandon your existing forms of income. You will need it.

Even in the western world, you need to plan on 5 years before you make a profit with a new enterprise. Most new start-ups fail during the first year of operation. Usually because not enough funds/resources were set aside to support it, until it could start generating revenue.

Farming the world over is a difficult business. It's the only business you pay retail for your materials, transportation and services; only to sell your finished product for wholesale. It's fast becoming a business only for big corporations, the small farmer doesn't stand a chance.

BB,

Well summed up. I hope that "a chance" even a small one does exist, I for one will keep looking for it. But for now the rain has stopped persisting down so it time for the pigs to get a late breakfast.

Finner,

It seems my internet connection was the reason I couldn't see the link. Got it now.

IA

[dmax]

DMAX,

I would like to add a word of caution on following popular trends of investment such as machinery and contracting.

I purchased my second hand tractor a few years ago to support what I am doing, not to make money ploughing for other people. No-one in my village had ever seen a rotary cultivator. At that time there was one Ford 6610 in the area that was always busy and demanded a decent rate per hour. The operator was brilliant so he represented good value. I hired a team of tractors and an excavator to clear a 12 rai plot, again good machines and operators. Again not cheap but exactly what I wanted done. As for rice harvesters, there wasn't any around.

But that was then. Today the situation is different, having imagined the "fortunes" made by the original few, the many have become tractor operators flooding the market with cheap contractors. The rates are half what they were and competition is fierce. Given Finner's comments on abandoned equipment when in need of repair, the ease of finance and lack of market research of most Thais, the almost total lack of any preventative or even regular maintenance and the complete disrespect shown to machinery, investing in farm equipment for your Thai family to operate and make money is a fantasy.

Be wary of investing in this type of enterprise. If you are going to do so then with respect you will need to follow PN's lead and do it professionally. That will need more capital than you have nominated to establish and even more to develop a market and maintain the equipment. Prepare the ground, harvest the rice, and then bale the straw. Great business model, good returns but constant hard work and investment. Yes, lesser equipment will do the job maybe, but spending half the day pulling bogged harvesters out doesn't make money in such a short and intense season.

As a related issue, student housing has been mentioned. When I first visited Isaan some ten years ago, I was amazed at the number of shop-house complexes that were being built in the most unlikely spots. Years later many are still unoccupied, some uncompleted and even some abandoned. Whilst there were very good taxation benefits for the rich during this time as the government attempted to decentralise, many where pure folly. I wonder how many people building student accommodation have actually studied the project in depth? Number of rooms by the rate per month way of calculating ROI and hence investment decisions seems a little thin to me.

DMAX, there is nothing wrong with playing follow the leader but make sure the leader knows what he is doing!

Isaan Aussie

thanks, some very good info posted here and i will take heed, as i say its all a learning curve for me at the moment

[pnustedt]

I make most of my money out of contract work - tractor work, harvesting (about 2k rai/pa and increasing) and baling. Most of my work is done over 6 weeks and I make in excess of Bt1mill. The cost of living here (Sisaket) is very low so I am able to reinvest most of the returns.

Can I ask what the capital invested was, for a 1 mill+ p/a.

I might find myself living in Sisaket myself one day as the missus is from Kantharalak.

About 5 or 6 mill bt has been spent on equipment and facilities, much of that came from re-investment of earnings though. I started the venture over 4 yrs ago with the purchase of a harvester for Bt2mill.

[thunder30101]

Here in khon Kaen at KKU apartments sprout like weeds and most of them are half empty if even that full. I always wondered how so many construction projects could be happening all the time until I figured out the banks pay such crappy rates for saving. A thai will build a house, apt or whatever just for a place to park their money. The problem is they build them and let them rot, never doing any upkeep ( I always laugh at the paint shops with a billion gallons of stock wondering who buys it). I guess it is a matter of hoping the depreciation of the house is less than their money over time.

[RedBullHorn]

DMAX

I look at the fish ponds and the frog farm that I built that everyone except me gets fish and frogs from;

I look at the abandoned pig house that I built;

I look at the place where the mushroom houses used to stand before it got windy;

I look at my neighbour's abandoned CP chicken ranch;

I look at the neighbour on the other side whose buffalos keep dying or being stolen that take 24 hr a day care;

I look through the weeds at the oil palm tree farm I paid for but eveyone's too <deleted> lazy to take care of;

I look at the tractors I bought for the family to use that they destroy every year (I have fun with them though)

I look at the 6 wheel truck I bought the family so that they could become rich as it sits rusting needing repairs.

And I don't live in that desert called Issan!

Best investment I ever made in this country was term deposits at the bank at a huge 3% minus tax and the condo which has doubled in price over the last 10 years.

The old girl has decided to get into the student rental thing as a couple of others have mentioned. I'll let you know how much money I lose on that...........

Finner,

Can you provide any clues as too why all these wonderful creations of yours have not paid off?

Isaan Aussie

Like my old man once said "...it's not what you're doing wrong, but what the others are doing right..."

Others like me and IA are making money out of our investment, one got to do is have a passion, hands-on and be committed....also the understanding of money and business management play a big part.

I don't go get a dog as pet and expect someone else to feed it.

Yes, being a foreigner from a city state and no experience in live stock farming or agriculture, Thais seem to be able to predict what i intend to do or invest will be met with a severe downfall...in other words " you no Thai farmer, you cannot do, sure fail and money gone~"

I dug the ponds to raise catfish...the villagers gossippied i will go bankrupt,

I build and opened a home shop selling DIY wasadu and alai for tractors...the villagers gossipped i will go bankrupt,

I build sheds and do piggeries....the villagers gossipped i knew nothing about raising pigs...and again yes...i will go bankrupt !

But when i ride in a new Toyota Vigo double cab, they wonder where i got the money for it,

When i buy a plot of land, they wonder if i'm paying through installments...

My neighbour who own a grocery shop usually have a handful of villiages hanging and sitting around gossipping or eating kayteow just could resist, when she get the chance she rebarked them " ...Don't you people have eyes !!! He made a fortune all this years doing catfish, which you people said catfish can't make good money and he will fail ! if it's not making money then why is he digging more ponds for expansion ?...You people gossipped that he dug all his paddies field to make ponds and he will not have rice to eat, with all the profit in a year from raising catfishes, he could buy 10 times the rice of his paddies ! He knew that to own paddy land is sure a big Honor and reputation for a family- a so call "must have for face sake", so he bought out the neighbouring paddy plot for the sake of his wife's peace of mind. Don't just see that he's making good money and all your eyes turn red with envy...Oh yes~ you all can do is talks...but can you walk the walk !?!! "......

Her final words were " I just got to give it to him...i've seen his hands...lot of thick warts, that's the hands of working men, he is a foreigner and he works his farm, what do you do today ?...you ? and you ? how about you ? i thought you told me you are going to trim the grasses today ? Why? The sun too hot or you're not motivated today ? He may be a foreigner with no farming back ground but he's willing to learn and didn't give up. "

If the Thai can do it, so can i....and i swear to make it bigger and better. It's a matter of mentality.

Just my 2 satang

Edited September 28, 2010 by RedBullHorn

[IsaanAussie]

RBH,

Love your story, wish mine was as successful, no profits yet. But we share the same resolve that to get it done here needs hands on hard work.

Too many people I talk to ask a different dog question, they say "Why buy a dog and bark yourself?" Well I've got a dog and I bark all the time.....

IA

[tim armstrong]

DMAX,

I take your request for ideas very seriously as I have walked down this road for several years and as others suggest it is not easy.

Firstly understand yourself and your needs. How much money do you need to enjoy a meaningful lifestyle each month? Whats important to you, the person you have always been and the person you may wish to become? What are you looking for in your future life? Can you find that in rural Isaan?

That may well seem pretty airey-fairy but I have met people such as us who are attracted to Isaan but dont understand themselves or the environment they have placed themselves in. There is a huge gulf between the consumer based societies we come from and the basic need to have rice to eat which is all many locals here strive for.

I suggest that your question should be, How much money can I make in Isaan? Or indeed, Can I make enough money here in Isaan? The important word is "I", you will have to make it happen.

Those that surround me, have always been content to work very hard at planting and harvesting times, or about two months, but do little else throughout the year to improve their circumstances. With a tame farang around their lives become easier, fertiliser can be paid for with someone elses cash, friends can be employed to help do their work and they can relax with a monthly income for doing little and enjoy enormous face. Why wouldn't they smile at you? Beware of the crocodiles.

Whatever you decide to do, understand the nature of incomes here. They are small, nothing here makes a fortune easily or quickly. People here are risk takers and will jump into anything new, yet those same people resist change and will walk away from the smallest of obstacles. What may have the enthusiastic support of everyone to start with may well just simply run out of steam when the hard work starts. Stay clear of anything that relies on others that cannot be replaced easily. You do not want any uneducated "keymen" becoming critical to your business.

Equipment and improvements should be considered balanced against doing things the traditional manual way. Yes good tools make life easier and improve results, but reality is that many of those using them don't own them so will not treat your things with any care.

So base your decision on where to look to generate an income solely on what level of effort you are personally prepared to put in. Treat any assistance you get, for as long as it lasts, as a plus and be prepared to have an alternative to fill the gaps as they occur.

For those that read this and think I'm a hard nosed SOB, your not thinking Thai style. I have been personally disappointed many times by others and have learnt that if I fail, its my own fault, not the fault of people I try to impose my standards and work ethic onto. Nothing is for nothing here, why should we think differently.

DMAX, I hope you can find the answer to you next question, "What can I do ..... For me the answer is to earn as much as possible from as many things as possible. I grow rice and raise pigs, and I work hard producing compost from their manure and the rice straw both for sale and to reduce fertiliser costs. There are fish in our pond and a worm farm in the pig sty. We eat our own mushrooms and vegetables. We have made bacon and sausages. I am attempting to establish a fully integrated farm with a minimum external expenditure and sufficient income to enjoy a happy and contented lifestyle.

Whatever your choice is, be sure of one thing, to be successful you will have to work hard.

Isaan Aussie

Good advice from a fellow aussie. Very sensible approach. My only addition is - do something that you already have some knowledge of, or passion for doing. Coming to a foreign business world is hard enough, but without all the free encouragement advice and mentoring you may get in a western country, you are really going to struggle.

[David006]

DMAX,

I take your request for ideas very seriously as I have walked down this road for several years and as others suggest it is not easy.

Firstly understand yourself and your needs. How much money do you need to enjoy a meaningful lifestyle each month? Whats important to you, the person you have always been and the person you may wish to become? What are you looking for in your future life? Can you find that in rural Isaan?

That may well seem pretty airey-fairy but I have met people such as us who are attracted to Isaan but dont understand themselves or the environment they have placed themselves in. There is a huge gulf between the consumer based societies we come from and the basic need to have rice to eat which is all many locals here strive for.

I suggest that your question should be, How much money can I make in Isaan? Or indeed, Can I make enough money here in Isaan? The important word is "I", you will have to make it happen.

Those that surround me, have always been content to work very hard at planting and harvesting times, or about two months, but do little else throughout the year to improve their circumstances. With a tame farang around their lives become easier, fertiliser can be paid for with someone elses cash, friends can be employed to help do their work and they can relax with a monthly income for doing little and enjoy enormous face. Why wouldn't they smile at you? Beware of the crocodiles.

Whatever you decide to do, understand the nature of incomes here. They are small, nothing here makes a fortune easily or quickly. People here are risk takers and will jump into anything new, yet those same people resist change and will walk away from the smallest of obstacles. What may have the enthusiastic support of everyone to start with may well just simply run out of steam when the hard work starts. Stay clear of anything that relies on others that cannot be replaced easily. You do not want any uneducated "keymen" becoming critical to your business.

Equipment and improvements should be considered balanced against doing things the traditional manual way. Yes good tools make life easier and improve results, but reality is that many of those using them don't own them so will not treat your things with any care.

So base your decision on where to look to generate an income solely on what level of effort you are personally prepared to put in. Treat any assistance you get, for as long as it lasts, as a plus and be prepared to have an alternative to fill the gaps as they occur.

For those that read this and think I'm a hard nosed SOB, your not thinking Thai style. I have been personally disappointed many times by others and have learnt that if I fail, its my own fault, not the fault of people I try to impose my standards and work ethic onto. Nothing is for nothing here, why should we think differently.

DMAX, I hope you can find the answer to you next question, "What can I do ..... For me the answer is to earn as much as possible from as many things as possible. I grow rice and raise pigs, and I work hard producing compost from their manure and the rice straw both for sale and to reduce fertiliser costs. There are fish in our pond and a worm farm in the pig sty. We eat our own mushrooms and vegetables. We have made bacon and sausages. I am attempting to establish a fully integrated farm with a minimum external expenditure and sufficient income to enjoy a happy and contented lifestyle.

Whatever your choice is, be sure of one thing, to be successful you will have to work hard.

Isaan Aussie

Good advice from a fellow aussie. Very sensible approach. My only addition is - do something that you already have some knowledge of, or passion for doing. Coming to a foreign business world is hard enough, but without all the free encouragement advice and mentoring you may get in a western country, you are really going to struggle.

yup..always someone everyplace who will say with 'intake of breath'.."won't work, can't be done" etc..great incentive to prove 'em wrong....application and hard work... Had many Farangs tell me.."<deleted> do you know about rubber farming?"..."why don't you buy a bar" etc..."build a house on a mountain" .."good luck" !! Truth is never knew sod all about farming..still learning thanks to wifey and her family. Oh and building?....Not sure I would have done it if I knew how bloody hard and frustrating it would be, glad I did though.

Just a note on rubber farming ROI..after three years averaging gross 15%pa ROI.hence the producing parcel of land has almost paid for itself. The mature trees we(her indoors actually) are cutting (about 600)are not the greatest and probably better trees would have a higher yield. We will have some additional 3000 trees coming on line in a couple of years. The hardest work is the brush cutting and chucking fertilizer and of course collecting and carrying the buckets of latex...wife and sometimes family members cut the rubber trees.I am just the "donkey" man...tried cutting..wife shook her head and banned me after three attempts..lol

.costs for fertilizer cups/wires anti fungal, tools etc would only amount to about 30k a year for the mature trees...

[RedBullHorn]

team work ~

[dmax]

DMAX,

I take your request for ideas very seriously as I have walked down this road for several years and as others suggest it is not easy.

Firstly understand yourself and your needs. How much money do you need to enjoy a meaningful lifestyle each month? Whats important to you, the person you have always been and the person you may wish to become? What are you looking for in your future life? Can you find that in rural Isaan?

That may well seem pretty airey-fairy but I have met people such as us who are attracted to Isaan but dont understand themselves or the environment they have placed themselves in. There is a huge gulf between the consumer based societies we come from and the basic need to have rice to eat which is all many locals here strive for.

I suggest that your question should be, How much money can I make in Isaan? Or indeed, Can I make enough money here in Isaan? The important word is "I", you will have to make it happen.

Those that surround me, have always been content to work very hard at planting and harvesting times, or about two months, but do little else throughout the year to improve their circumstances. With a tame farang around their lives become easier, fertiliser can be paid for with someone elses cash, friends can be employed to help do their work and they can relax with a monthly income for doing little and enjoy enormous face. Why wouldn't they smile at you? Beware of the crocodiles.

Whatever you decide to do, understand the nature of incomes here. They are small, nothing here makes a fortune easily or quickly. People here are risk takers and will jump into anything new, yet those same people resist change and will walk away from the smallest of obstacles. What may have the enthusiastic support of everyone to start with may well just simply run out of steam when the hard work starts. Stay clear of anything that relies on others that cannot be replaced easily. You do not want any uneducated "keymen" becoming critical to your business.

Equipment and improvements should be considered balanced against doing things the traditional manual way. Yes good tools make life easier and improve results, but reality is that many of those using them don't own them so will not treat your things with any care.

So base your decision on where to look to generate an income solely on what level of effort you are personally prepared to put in. Treat any assistance you get, for as long as it lasts, as a plus and be prepared to have an alternative to fill the gaps as they occur.

For those that read this and think I'm a hard nosed SOB, your not thinking Thai style. I have been personally disappointed many times by others and have learnt that if I fail, its my own fault, not the fault of people I try to impose my standards and work ethic onto. Nothing is for nothing here, why should we think differently.

DMAX, I hope you can find the answer to you next question, "What can I do ..... For me the answer is to earn as much as possible from as many things as possible. I grow rice and raise pigs, and I work hard producing compost from their manure and the rice straw both for sale and to reduce fertiliser costs. There are fish in our pond and a worm farm in the pig sty. We eat our own mushrooms and vegetables. We have made bacon and sausages. I am attempting to establish a fully integrated farm with a minimum external expenditure and sufficient income to enjoy a happy and contented lifestyle.

Whatever your choice is, be sure of one thing, to be successful you will have to work hard.

Isaan Aussie

Good advice from a fellow aussie. Very sensible approach. My only addition is - do something that you already have some knowledge of, or passion for doing. Coming to a foreign business world is hard enough, but without all the free encouragement advice and mentoring you may get in a western country, you are really going to struggle.

yup..always someone everyplace who will say with 'intake of breath'.."won't work, can't be done" etc..great incentive to prove 'em wrong....application and hard work... Had many Farangs tell me.."<deleted> do you know about rubber farming?"..."why don't you buy a bar" etc..."build a house on a mountain" .."good luck" !! Truth is never knew sod all about farming..still learning thanks to wifey and her family. Oh and building?....Not sure I would have done it if I knew how bloody hard and frustrating it would be, glad I did though.

Just a note on rubber farming ROI..after three years averaging gross 15%pa ROI.hence the producing parcel of land has almost paid for itself. The mature trees we(her indoors actually) are cutting (about 600)are not the greatest and probably better trees would have a higher yield. We will have some additional 3000 trees coming on line in a couple of years. The hardest work is the brush cutting and chucking fertilizer and of course collecting and carrying the buckets of latex...wife and sometimes family members cut the rubber trees.I am just the "donkey" man...tried cutting..wife shook her head and banned me after three attempts..lol

.costs for fertilizer cups/wires anti fungal, tools etc would only amount to about 30k a year for the mature trees...

nice to hear that there are guys like you working hard and earning a living here in isaan, fair play to you. my wife has also asked me to consider rubber farming, i may as well invest in something like this and wait a few years untill the trees mature, the money is sitting idle anyway. first i will be doing a lot of research into it and wont dive into anything quickly.

[somo]

Hi DMAX

Your OP has certainly provoked a lot of interesting posts some of which I think are a bit too

negative. Nothing is going to give you a guaranteed return other than investing in something

like goverment bonds but if you feel you would like to try your hand at farming don't be put off

by others as you can only find out if it is for you by trying it.

Having said that don't throw all your money into it straight away. Out of 2 million I would suggest you first only comit a max of 500K and see how it goes. You will learn a lot before commiting the rest of your money.

I am an absentee farmer and do no work it at all. I just supply the money. Having said that I get a real buz out of seeing things grow and intend to do it full time within the next 5 years.

2 1/2 years ago we bought about 25 rai and rented a further 15 and Planted cassava. The first year we broke even but I learnt. When we harvest early next year I fully expect to sell the produce for around 600k which will more than pay off everything I have invested. I will use that money to buy/rent more land so the expansion is funded out of income. If I was involved day to day I wouldn't make any more money but would probably have not made the mistakes of my first year.

I reckon a conservative profit from growing cassava would be about 5K/year/rai (I know of others who make double that)but prices fluctuate a lot thus the uncertainty. The cost of land is thus very important when considering what would be an acceptable return on your money.

In my area of Isaan farming land now costs around 20-25K/rai so you are looking at around 25% on your money however once you have paid off the land the return is more like 100%/year as the cost of planting, weeding, harvesting etc comes to around 4 or 5K/year/rai and your profit the same.

If you go the farming route I would initially rent some land for a couple of years and get really good at what you do then expand. Don't buy any capital equipment like tractors etc until you have a lot more land.

Good luck

[charlie10]

Fantastic thread. Some great comments and insight based on experience and some really good advice.

For what it's worth here's my two penneth worth.

Want to make money in Isaan?

1) Have a portfolio of cash making opportunities. Don't put all your money in just one thing. You need cash cows to support the other lower money generating businesses you may want to do.

2) Sell to the farang. That's the only way you're going to get any kind of meaningful return on your investment. You're never going to make great money selling to the Thai. The prices you will have to charge and the profit margins are simply too low. That means either:

a: Thinking globally rather than locally to develop a busines that can become your cash cow. Find something you can sell to the farang over the interent. Access a global market where peope actually have money and are prepared to pay more than a few hundred baht for something. Sell via your own website, ebay, Amazon etc.

b: Investing where the tourists are in Thailand rather than locally in Isaan. Getting the tourist or even expat dollar in Isaan is difficult. Of the former there are too few, and of the latter, most have adjusted to Thai pricing expecatations and so anything you sell will most likley have to be low price, low profit.

The key thing to remember is that making any kind of meaningful money in the Western sense over here is very very difficult, although as you can see from the thread, some of been relatively successful at this. Note the word relatively. As Isaan Aussie very perceptively said earlier in the thread, you really need to understand what you want out of your investment. I would suggest if it's just good money then you may struggle.

I survive here on revenue from 3 things:

1) A very small rental income from my house in the U.K.

2) A very small income from selling a ''high' profit product over the internet to people living outside Thailand. This will become cash cow of sorts once my initial product investment costs are paid up.

3) A very small income from raising pigs. The latter is extremely hands on, hard manual work, and only worth it due to the fact that this physical work, and the raising pigs in a high welfare system, makes me happy. It offers me an escape from sitting at the PC all day and connects me with the rural farming way of life that surounds me.

None of these money making activities will ever make me rich, not even by local Isaan standards. But what they give me is the opportunity to live an endlessly interesting, fulfilling and enjoyable life in the one part of the world I really love. That's Isaan.

Therefore, I really advise you to think long and hard what you want out of your life over here, and how you will judge your success, both personally and professionally, before you do any investing of money.

Edited September 29, 2010 by charlie10

[Khonwan]

I agree completely with Somo’s post. I say rent land, plant cassava, and enjoy good returns 11 months later…or great returns after 18 months.

Farming land rental in my area is a maximum of 1,200 baht per rai; farm labour rate is normally 150 baht per 8-hour day; tractor rental for 7-disk plough is 220 baht per rai; contract spraying (whether hand-pump or motorized sprayer) costs me 200 baht per 200-litre solution sufficient for 0.33 rai (I supply the herbicide only); contract-harvest cost of 270 baht per tonne (includes labour & transport to processor); year-end price here (in my part of Nakhon Sawan) is expected to reach 3,600 baht per tonne (could easily be more).

Assuming rental costs of 1,500 baht per rai, first year purchase of stems at a cost of 6,000 baht per rai sufficient for 5 rai, farm labour rate of 200 baht per 8-hour day (for stem cutting, planting, and fertilizing), tractor rental for 7-disk plough of 300 baht per rai, tractor rental for 3-disk plough of 500 baht per rai, tractor rental for ridging plough of 300 baht per rai, tractor rental for harvest plough of 300 baht per rai, contracted weed-spraying cost of 300 baht per 200-litre solution, 1 pre-emergence weed spraying (herbicide: 110 baht per rai) plus 2 post-emergence weed spraying (herbicide: 40 baht per rai), contract-harvest cost of 300 baht per tonne, 100kg of chemical fertiliser (eg 15-5-35, which I now use) per rai at a cost of 1,000 baht per 50kg bag, tuber sale price of 2,000 baht per tonne, harvest of 5 tonnes after 11 months, total pre-harvest cost of 300 rai of cassava would be 1,967,550 baht and would return a clear profit of 282,450 baht after 11 months.

Second year on (no stem purchases required), 370 rai of cassava would cost 1,982,645 baht pre-harvest and return a profit of 792,355 baht after 11 months.

These costs above are considerably higher than the costs in my area and the assumed sale price of cassava is less than currently available and much less than I would expect this season. The profits above do not include your sales of stems to others. I was happy to sell mine at 4,000 baht per rai – others were charging (and getting) up to 7,000 baht per rai.

These costs above for 300–370 rai do not mention total harvesting costs: this is because these costs can be met from immediate daily sales of the tubers. These costs are, of course, reflected in the indicated profit figures above.

I pay 160 baht per 8-hour day (not 150)but the rest of my costs are as indicated in my second paragraph for my area except that I own my land (ok, my wife does) and my Ford 6600; I am now moving to contract out my harvesting this season. Were I to rent 370 rai here and, for the sake of comparison did not use my own tractor, my pre-harvest costs would be 1,722,461 baht; my profit after 11 months (still assuming 5t/rai@B2,000/t) would be 1,337,439 (ignoring sales of stems). Were I to harvest after 18 months, obtaining 10 tonne per rai, my pre-harvest costs would remain the same but my profit would be 4,537,939 baht (2,268,970 baht annualised). Not bad from an initial outlay of 1,722,461. Assuming a price of 3,600 baht per tonne, that profit figure becomes becomes 10,457,939 after 18 months. Who says farming doesn’t pay?

I’m not suggesting that you (Dmax or any other newbie to farming) immediately rent 300 rai – just providing an idea of what is possible, based on what I consider are very conservative figures. As I have stated in the past, I consider cassava to be probably the easiest and least risky way to get into farming. Meallybug is a serious business risk though government measures involving the release of a parasitical wasp are likely to mitigate this. Make sure that your stems come from fields that have not been infected.

I would love to rent land around my area to grow further cassava but I cannot find any – most land owners are now farming themselves rather than renting out their land. So perhaps I should have started this post with, “IF you can find land to rent…”

I’ve already prepared a spreadsheet on these figures if wanted.

Rgds

Khonwan

[soidog2]

Khonwan !

Your math is mostly correct, but so is you ending.

In today's market you will not find any suitable land for rent, buying prices have skyrocketed as well.

I find myself offering B 60.000.00 per rai in areas where I own land bought at B 25.000.00 to 30.000.00 not that long ago. Asking prices for prime cassava properties are creeping over B 80.000.00 per rai.

There is no way a beginner can turn a profit except in theory.

Best regards

Edited September 30, 2010 by soidog2

[somo]

The cost and availability of land to rent is certainly a big issue but that is where some work and perserverence comes in. This is one area that my living in Bangkok most of the time is a disadvantage. Not being on the spot has meant I have missed some opportunities to rent and buy more land.

Prices seem to vary a lot area to area but for me rent is 500-750/rai/year (the 15 rai I rent was 500/year and I paid 5 years up front) As I said above to buy land is about 20-25K/rai (3 years ago it was half that) If I was on the spot I would hear about the possibilities and would gladly outbid on rent by offering 1000 Baht/rai as that is only 4 or 5% of the cost of buying it and considering the profit potential not excessive.

The other alternative that sometimes crops up (excuse the pun is called "jam" This occurs when someone with land needs a chunk of money but doesn't want to sell their land. Say a farmer has 30 rai. He will let you use his land in return for an interest free loan of say 60K Baht (something around 2k/rai is normal) You then have the use of the land until he repays the loan. He might never repay it so you effectlively have the land very cheap. You of course need to hold the papers to the land in exchange for the loan and to stipulate a minimum time say 2 years that you will have use of the land. If you can get a deal to jam some land it is a great way to start as it costs you nothing other than the interest on your money a bank might give you which is almost nothing at the moment.

The point is that getting started ain't easy and will take some time and determination but doesn't anything worthwhile?

[jamescollister]

dmax Don't know where in Issan you are, but if near Ubon I will be there for the hash on Saturday, if you want to talk about rubber. Better still Friday night at the wrongway, as I will be to drunk to speak after the hash. Jim

[finner]

Just wanted to clear something up concerning land purchase. Being only familiar with my local land situation (Surin), typical paddy or cassava land prices are B50,000 per rai and up with a Sor Por Kor deed which can only be purchased by family members although this can be stretched to distant family it seems. There is land for sale 20 Km away with a Chanoot deed but at least double the price. What is the situation in Issan?

Edited September 30, 2010 by finner

[IsaanAussie]

dmax Don't know where in Issan you are, but if near Ubon I will be there for the hash on Saturday, if you want to talk about rubber. Better still Friday night at the wrongway, as I will be to drunk to speak after the hash. Jim

Will be thinking of you on those rubber legs Saturday night. The drunker you stand there the longer you will get...? Still feeding the pigs...will miss it again

Isaan Aussie

[dmax]

Hi DMAX

Your OP has certainly provoked a lot of interesting posts some of which I think are a bit too

negative. Nothing is going to give you a guaranteed return other than investing in something

like goverment bonds but if you feel you would like to try your hand at farming don't be put off

by others as you can only find out if it is for you by trying it.

Having said that don't throw all your money into it straight away. Out of 2 million I would suggest you first only comit a max of 500K and see how it goes. You will learn a lot before commiting the rest of your money.

I am an absentee farmer and do no work it at all. I just supply the money. Having said that I get a real buz out of seeing things grow and intend to do it full time within the next 5 years.

2 1/2 years ago we bought about 25 rai and rented a further 15 and Planted cassava. The first year we broke even but I learnt. When we harvest early next year I fully expect to sell the produce for around 600k which will more than pay off everything I have invested. I will use that money to buy/rent more land so the expansion is funded out of income. If I was involved day to day I wouldn't make any more money but would probably have not made the mistakes of my first year.

I reckon a conservative profit from growing cassava would be about 5K/year/rai (I know of others who make double that)but prices fluctuate a lot thus the uncertainty. The cost of land is thus very important when considering what would be an acceptable return on your money.

In my area of Isaan farming land now costs around 20-25K/rai so you are looking at around 25% on your money however once you have paid off the land the return is more like 100%/year as the cost of planting, weeding, harvesting etc comes to around 4 or 5K/year/rai and your profit the same.

If you go the farming route I would initially rent some land for a couple of years and get really good at what you do then expand. Don't buy any capital equipment like tractors etc until you have a lot more land.

Good luck

thanks somo great advice, the wife is going to rent 10 rai of land next month, we went to see the old girl who is going to rent it to her yesterday, apparently its her fathers friend, the wife doesnt put money down to rent the land she wil pay for labour and everything else then at the end of the year she wil split the profits with the old girl. she intends to grow sugar or cassava. her brothers and family will work the land for her while we are back in uk for a while. i dont understand if the old girl has 10 rai why she doesnt work it herself ? wife says she doesnt have the money. anyway we will try this and see how it goes this year, i dont imagine she could lose on it but then again i just dont know.

can anyone tell me whtat is best to grow cassava ? sugar ? rubber ? i can buy land anytime and wait for the rubber trees to mature and sit on it as my money is sitting idle anyway.

also we have thought about making some signs and putting them around town naied to trees so that locals know we are wanting to buy land, is this a good idea or is it better just to let her family ask around by word of mouth ?

thanks

[dmax]

dmax Don't know where in Issan you are, but if near Ubon I will be there for the hash on Saturday, if you want to talk about rubber. Better still Friday night at the wrongway, as I will be to drunk to speak after the hash. Jim

thanks jim, but im half way up to nong kai at the moment, going on a bender for two days away from the wife

[rgs2001uk]

Just wanted to clear something up concerning land purchase. Being only familiar with my local land situation (Surin), typical paddy or cassava land prices are B50,000 per rai and up with a Sor Por Kor deed which can only be purchased by family members although this can be stretched to distant family it seems. There is land for sale 20 Km away with a Chanoot deed but at least double the price. What is the situation in Issan?

You have answered your own question, its to do with location and type of deed.

I have looked at land with full chanot, right across the road there was land for about 1/4 of the price, work that out.

[finner]

OK then, RGS2001, let me clarify my question. I'm not asking for myself since I know the local situation, I'm asking for dmax's sake. In my area there is very little Chanoot land and what there is is usually very close to towns and cities, not really farming land. Everywhere else is Sor Por Korsville which is something to be factored in when laying out your retirement money.

I guess my question should have been: Is there any Chanoot FARMland in the Issan area and if so, how much is it because as you mentioned it can be 4 times the price of anything else. In my experience you don't get Chanoot farmland till you get south of Korat?

Edited October 1, 2010 by finner

[BB1950]

also we have thought about making some signs and putting them around town naied to trees so that locals know we are wanting to buy land, is this a good idea or is it better just to let her family ask around by word of mouth ?

Better to let her family ask around or by word of mouth.

Don't let it be known that a foreigner is involved.

[David006]

DMAX,

I take your request for ideas very seriously as I have walked down this road for several years and as others suggest it is not easy.

Firstly understand yourself and your needs. How much money do you need to enjoy a meaningful lifestyle each month? Whats important to you, the person you have always been and the person you may wish to become? What are you looking for in your future life? Can you find that in rural Isaan?

That may well seem pretty airey-fairy but I have met people such as us who are attracted to Isaan but dont understand themselves or the environment they have placed themselves in. There is a huge gulf between the consumer based societies we come from and the basic need to have rice to eat which is all many locals here strive for.

I suggest that your question should be, How much money can I make in Isaan? Or indeed, Can I make enough money here in Isaan? The important word is "I", you will have to make it happen.

Those that surround me, have always been content to work very hard at planting and harvesting times, or about two months, but do little else throughout the year to improve their circumstances. With a tame farang around their lives become easier, fertiliser can be paid for with someone elses cash, friends can be employed to help do their work and they can relax with a monthly income for doing little and enjoy enormous face. Why wouldn't they smile at you? Beware of the crocodiles.

Whatever you decide to do, understand the nature of incomes here. They are small, nothing here makes a fortune easily or quickly. People here are risk takers and will jump into anything new, yet those same people resist change and will walk away from the smallest of obstacles. What may have the enthusiastic support of everyone to start with may well just simply run out of steam when the hard work starts. Stay clear of anything that relies on others that cannot be replaced easily. You do not want any uneducated "keymen" becoming critical to your business.

Equipment and improvements should be considered balanced against doing things the traditional manual way. Yes good tools make life easier and improve results, but reality is that many of those using them don't own them so will not treat your things with any care.

So base your decision on where to look to generate an income solely on what level of effort you are personally prepared to put in. Treat any assistance you get, for as long as it lasts, as a plus and be prepared to have an alternative to fill the gaps as they occur.

For those that read this and think I'm a hard nosed SOB, your not thinking Thai style. I have been personally disappointed many times by others and have learnt that if I fail, its my own fault, not the fault of people I try to impose my standards and work ethic onto. Nothing is for nothing here, why should we think differently.

DMAX, I hope you can find the answer to you next question, "What can I do ..... For me the answer is to earn as much as possible from as many things as possible. I grow rice and raise pigs, and I work hard producing compost from their manure and the rice straw both for sale and to reduce fertiliser costs. There are fish in our pond and a worm farm in the pig sty. We eat our own mushrooms and vegetables. We have made bacon and sausages. I am attempting to establish a fully integrated farm with a minimum external expenditure and sufficient income to enjoy a happy and contented lifestyle.

Whatever your choice is, be sure of one thing, to be successful you will have to work hard.

Isaan Aussie

Good advice from a fellow aussie. Very sensible approach. My only addition is - do something that you already have some knowledge of, or passion for doing. Coming to a foreign business world is hard enough, but without all the free encouragement advice and mentoring you may get in a western country, you are really going to struggle.

yup..always someone everyplace who will say with 'intake of breath'.."won't work, can't be done" etc..great incentive to prove 'em wrong....application and hard work... Had many Farangs tell me.."<deleted> do you know about rubber farming?"..."why don't you buy a bar" etc..."build a house on a mountain" .."good luck" !! Truth is never knew sod all about farming..still learning thanks to wifey and her family. Oh and building?....Not sure I would have done it if I knew how bloody hard and frustrating it would be, glad I did though.

Just a note on rubber farming ROI..after three years averaging gross 15%pa ROI.hence the producing parcel of land has almost paid for itself. The mature trees we(her indoors actually) are cutting (about 600)are not the greatest and probably better trees would have a higher yield. We will have some additional 3000 trees coming on line in a couple of years. The hardest work is the brush cutting and chucking fertilizer and of course collecting and carrying the buckets of latex...wife and sometimes family members cut the rubber trees.I am just the "donkey" man...tried cutting..wife shook her head and banned me after three attempts..lol

.costs for fertilizer cups/wires anti fungal, tools etc would only amount to about 30k a year for the mature trees...

nice to hear that there are guys like you working hard and earning a living here in isaan, fair play to you. my wife has also asked me to consider rubber farming, i may as well invest in something like this and wait a few years untill the trees mature, the money is sitting idle anyway. first i will be doing a lot of research into it and wont dive into anything quickly.

thx mate..not in Isaan BTW. (south of Krabi)..had no intention of rubber farming or any farming come to that.just wanted a sea change I guess....yup keep your (better you're wife's lol)ear to the ground re land or farms "for sale" preparing land and planting trees is best left to someone else...better to look at purchasing a pre planted property with young trees that way you could get someone to check 'em out as to type and condition..etc just my "so experienced" view..lol good luck..

[finner]

dmax, if you are interested in chicken farming, read this

[Khonwan]

Hi Soidog2

Farming land in my area is now mostly SorPorKor land and costs around 25,000 baht per rai – was only 5,000 baht per rai for around 10 years up until perhaps 4 years ago. I lent some money to a relative plus a friend 10 months ago to rent between them a 47-rai plot @ 1,200 baht for each of 3 years – rental opportunities do exist but are hard to find these days. I am considering letting it be known that I’m prepared to offer 2,000 baht (possibly more) per rai to rent. Only considering because I’m torn by the ethics – I have more than sufficient income at present and land-rental by me would deprive more needy neighbours.

In response to a PM request received from another cassava growing member, I am going to attach a 3-sheet spreadsheet using the data I provided in my previous post, with minor corrections, in the cassava pinned thread.

Rgds

Khonwan

PS I’m currently growing 160 rai of cassava, 95% Huay Bong 60.

[Livinginexile]

Except for personal consumption, stay away from rice paddies. You will loose money.

Money in Isaan is based on the rice industry. Any money spent here comes from rice - that is where the money is. I make good money from rice paddies.

Well I suppose the term "good money" is relative.

To satisfy my curiosity, can you please let me know how much profit you make per rai per year from rice paddies?

Lets throw some figures around to give us an insight as to what good money actually is, 6,000, 8,000, 10,000 or 10,000+ per year per rai profit.

I do not own a lot of land - about 40 rai. I make most of my money out of contract work - tractor work, harvesting (about 2k rai/pa and increasing) and baling. Most of my work is done over 6 weeks and I make in excess of Bt1mill. The cost of living here (Sisaket) is very low so I am able to reinvest most of the returns.

You make 1 million bht+ per year out of tractor work??

I find that very hard to believe.

My wifes family own tractors/harvesters etc and they work very hard.

MAX income is 200k/year.

There is a lot of competition out there, every second Thai owns some kind of tractor in Issan.

Maybe I'm missing something here, could you give us a breakdown of where your income is derived?

[pnustedt]

You make 1 million bht+ per year out of tractor work??

I find that very hard to believe.

My wifes family own tractors/harvesters etc and they work very hard.

MAX income is 200k/year.

There is a lot of competition out there, every second Thai owns some kind of tractor in Issan.

Maybe I'm missing something here, could you give us a breakdown of where your income is derived?

I have already told you that I harvest over 2k rai/pa, at Bt600/650/rai the income is in excess of Bt1.2m, plus tractor work (plough, rotavate, baling, land management, etc), income from 40 rai (mainly rice and chillies). I don't really care if you believe or not - you obviously miss quite a lot.

[IsaanAussie]

You make 1 million bht+ per year out of tractor work??

I find that very hard to believe.

My wifes family own tractors/harvesters etc and they work very hard.

MAX income is 200k/year.

There is a lot of competition out there, every second Thai owns some kind of tractor in Issan.

Maybe I'm missing something here, could you give us a breakdown of where your income is derived?

I have already told you that I harvest over 2k rai/pa, at Bt600/650/rai the income is in excess of Bt1.2m, plus tractor work (plough, rotavate, baling, land management, etc), income from 40 rai (mainly rice and chillies). I don't really care if you believe or not - you obviously miss quite a lot.

What is it that people say about looking at the forest and failing to see the trees? Or is it the other way around? I have seen PN's equipment and operation and whilst the equipment may be the same, the business operation I would suggest is quite possibly very different. From my own experience, my little tractor was (ab)used by relatives in their attempts to get rich and simply sat there until I got back and paid to fix it. The work that was lined up, forgotten. Now when the story is retold, they tell of the year when they only made 9,000 baht ploughing. My side of the same story is I lost 10,000 baht pulling out tree stumps with a chain tied to the back end of the plough.

I mean no disrespect to your wifes family Exile, but I suggest you look as much at the business acumen and methods as the machinery.

Isaan Aussie