Another Rubber Newbie

[Dakling]

Hi all, I am new to the farming forum but have been lurking quite a while. I was hoping those experienced with rubber farming would be able to a look at my plans and point out any glaring errors in my assumptions.

My wife and I have about 34 rai of land in Sisaket. The land is in 3 different plots, one is 13 rai, the second is 11 rai and the last is 10 rai. We are planning on planting rubber trees on the first two plots this year (24 rai), and will plant the last 10 rai with rubber trees next year.

We intend on going with the RRIM 600 clones and it is looking like we will have to pay 45 baht/tree for this years planting. The relatives are keen on doing 6m x 3m spacing, but I am pushing for a 7m x 3m spacing, the first of many disagreements I am sure. While the trees are young I am intending on using one round of manure and one round of chemical fertilizer per year but may change that to 2 rounds of chemical fertilizer per year once the trees are older. Once trees are producing it will definitely be 2 rounds of chemical fertilizer per year.

The wife’s family will be managing the operation for the most part put thankfully they do listen to me for the most part. Granted they occasionally think that I am a bit nutty, with farang ideas and occasionally feel the need to “adjust” execution of plans to save me from my folly. I have no fears about the family’s honesty or work ethic but their business acumen leaves much to be desired.

I have put together the following numbers based on my review of posts on this forum and a few other sources. Please take a look and let me know if I have screwed things up. To be honest, the returns look high to me but I would be ok with only 50-75% of the returns calculated below. My main goal is to help my wives family felp themselves out of poverty over time, if I make a return on investment it would be a nice bonus.

Once all the trees are producing for a few years would the below be achievable?

34 rai at 7m x 3m spacing = 34 x 75 trees = 2,550 trees

1 kg dry latex / tree / month = 2,550 kg latex / month

8 months of cutting / year = 20,400 kg latex / year

80 baht / dry kg = 1,632,000 baht / year

50% of production to cutter workforce -816,000 baht/year

Net to me minus 50% of operating costs (fert. etc) ~ 750,000 baht/year

Sorry for the long first post, all input appreciated.

[tothemark]

Hello Dakling,

I would think James Collister will answer you best on the subject of growing rubber.

For my part I would comment as follows from the older rubber perspective:

Your figures are out, cup rubber is way down at the moment and is likely to be half your figure of 80bht within the next few days. So you need to readjust your figures on a what if basis. That way you wont have any nasty suprises.

Not all your trees will be producers, allow for a 10% fail

Unlikely to get a yield of 1kg until the trees are 10 years plus, work on .7 for the second year of cutting on an increasing scale.

Allow for an investment in year 10 for rubber mat equipment and do rubber mats when the dry rubber content has become greater. IMO

You can get a 60/40 split (60 to yourself) thats your call.

You should get more than 8 months cutting - lots of factors determine this worth another thread methinks ?

Is your land clear ? what did it have on it before ? whats its soil base ? Water anywhere ?

Bung the answers to the last line and you will get a clearer answer from the other growers

[Dakling]

Is your land clear ? what did it have on it before ? whats its soil base ? Water anywhere ?

Bung the answers to the last line and you will get a clearer answer from the other growers

13 rai had cassava last year but laid fallow a long time before that. 11 Rai laid fallow a while, just cleared it of small scrub trees. 10 rai has been used for rice forever, likely a bit tired but I plan on putting cassava on it this year and rubber next year.

Soil has not been tested yet, reddish brown sandy/silty red soil. Seems to pack in solidly (silty) but I think sandy enough to have adequate porosity. Don't think it is too clayey as is doesn't slime up to bad when wet. Mostly hoping about this assessment though since I haven't had it tested and my ole' eyeball has been fooled before (not in Thailand right now to get testing done).

No access to water, no boreholes or wells. The 13 rai plot is quite distant from water sources, the other 21 is close to water but no direct access to it.

I was thinking of 10+ year old trees for the 1kg/month of dry latex target, I understand the trees need to mature before they hit max production but I am not sure what the production curve looks like. For instance, is a 7 year old tree at 50% or 70% of full production?

I hear ya on the rubber price but my guess is that by the time I am ready to tap, it will be 80 baht/kg min. I think oil prices are likely gonna climb steadily over the next 10 years to over $150 per barrel and rubber/latex should closely follow that. As Tata motors and their ilk start to provide the masses of India and China with vehicles things will get interesting on the supply side for rubber and other oil based products. I figure rubber and bio-fuel crops will do well going forward.

Thanks for the feedback....glad to see my numbers aren't totally out to lunch other than the current prices.

Edited March 15, 2011 by Dakling

[jamescollister]

Hi there

Won't get into this too deep as most of what you ask has been covered a dozen times on this forum. First forget the rice paddy, waste of time and money unless you are going to spend big fixing the soil and raising the level. 2nd by the sound of it you will not be there to take care of the place. If your wifes family is left in charge, no matter how honest, loyal and trustworthy they are, they will do things the Thai way not the right way. Then you will get Thai returns, not good well run plantation returns. Just one other thing and I read this often that the family will take care of the trees so that after 7 years they can tap and get a share, if they are so keen to tap rubber for 40% they can come here and tap. I am 2 tappers short and am not the only plantation that can;t get tappers. Think hard before you start spending. Jim

[Dakling]

Hi there

Won't get into this too deep as most of what you ask has been covered a dozen times on this forum. First forget the rice paddy, waste of time and money unless you are going to spend big fixing the soil and raising the level. 2nd by the sound of it you will not be there to take care of the place. If your wifes family is left in charge, no matter how honest, loyal and trustworthy they are, they will do things the Thai way not the right way. Then you will get Thai returns, not good well run plantation returns. Just one other thing and I read this often that the family will take care of the trees so that after 7 years they can tap and get a share, if they are so keen to tap rubber for 40% they can come here and tap. I am 2 tappers short and am not the only plantation that can;t get tappers. Think hard before you start spending. Jim

Thanks for the response,

I'll do my best to reply to your points in order.

• I understand that this has all been covered in the forum and I used the forum as a resource to develop my little financial profile. I was hoping that folks could offer insight to see if I had gone drastically wrong in any of my assumptions. The information I have uncovered to date though searching this and other forums has been pretty variable and also inconsistent in the use of terms and units. I also understand that no one can give definitive answers as things will vary based on local rainfall, soil types, land gradients, operational inefficiencies, etc, etc, etc,
• The 10 rai field where the rice has been grown is not actually a rice paddy, or at least not a conventional one. It is not low-lying nor does it have a perimeter berm/dyke/levee. I have no idea why it was used for rice before and I am not certain that it actually was. We only just purchased that field last month. Soil seems reasonably good but I am sure it has been played out nutrient wise in the past.
• I intend on moving back to Thailand in the new year and will be working in the Bangkok area. I intend on retiring around the same time as the trees will mature to the point of being tapped so at that point I could up my time commitment significantly, if required. I'll likely be looking for something to keep me busy anyhow.
• The tapping issue is a bit more complicated as currently only one family member has any experience tapping trees. He has been working as a labourer on a rubber farm in the south of Thailand for years and is just now being taught how to tap. He seems to do about an 8 month on, 4 month off rotation in the south though that seems variable. He and his wife already have 6 rai of trees planted that are currently 2 years old and appear to be doing well. The plan is that over the next 7 years, while our trees are growing, he will teach the rest of the family how to do it. I think that one of the problems with tapping is that no owners want to take the risk on inexperienced tappers so it is difficult to get that initial experience. There are 6 brothers and brothers in law who are keen to do the tapping and countless cousins who would also jump at the chance but none have ever done it. Thankfully the new tappers can all learn and practice on the BIL's trees in 5 years.

As far as spending money goes, I am hoping the future costs over the next few years wont be too excessive. I am thinking 150k baht for trees (34 rai * 75 trees/rai * 45 baht/tree +10% replanting + 25k planting labour), and about 50k baht/year for fertilizer. All the labour should be free until we start tapping. I have told the family they can intercrop the trees for the first 3 years after they are planted with trees, in return for looking after the trees until they start to produce. We have already discussed that the trees take priority over the intercrop though and that they can't put anything like cassava in that would starve the trees of nutrients and water.

If you are willing to train the tappers I may have some interested hands for you, not sure how many would want to relocate though as they seem to be homebodies and most are married with young kids.

Still looking for feedback, opinions, advice.....

Edited March 15, 2011 by Dakling

[jamescollister]

Hi there

Won't get into this too deep as most of what you ask has been covered a dozen times on this forum. First forget the rice paddy, waste of time and money unless you are going to spend big fixing the soil and raising the level. 2nd by the sound of it you will not be there to take care of the place. If your wifes family is left in charge, no matter how honest, loyal and trustworthy they are, they will do things the Thai way not the right way. Then you will get Thai returns, not good well run plantation returns. Just one other thing and I read this often that the family will take care of the trees so that after 7 years they can tap and get a share, if they are so keen to tap rubber for 40% they can come here and tap. I am 2 tappers short and am not the only plantation that can;t get tappers. Think hard before you start spending. Jim

Thanks for the response,

I'll do my best to reply to your points in order.

• I understand that this has all been covered in the forum and I used the forum as a resource to develop my little financial profile. I was hoping that folks could offer insight to see if I had gone drastically wrong in any of my assumptions. The information I have uncovered to date though searching this and other forums has been pretty variable and also inconsistent in the use of terms and units. I also understand that no one can give definitive answers as things will vary based on local rainfall, soil types, land gradients, operational inefficiencies, etc, etc, etc,
• The 10 rai field where the rice has been grown is not actually a rice paddy, or at least not a conventional one. It is not low-lying nor does it have a perimeter berm/dyke/levee. I have no idea why it was used for rice before and I am not certain that it actually was. We only just purchased that field last month. Soil seems reasonably good but I am sure it has been played out nutrient wise in the past.
• I intend on moving back to Thailand in the new year and will be working in the Bangkok area. I intend on retiring around the same time as the trees will mature to the point of being tapped so at that point I could up my time commitment significantly, if required. I'll likely be looking for something to keep me busy anyhow.
• The tapping issue is a bit more complicated as currently only one family member has any experience tapping trees. He has been working as a labourer on a rubber farm in the south of Thailand for years and is just now being taught how to tap. He seems to do about an 8 month on, 4 month off rotation in the south though that seems variable. He and his wife already have 6 rai of trees planted that are currently 2 years old and appear to be doing well. The plan is that over the next 7 years, while our trees are growing, he will teach the rest of the family how to do it. I think that one of the problems with tapping is that no owners want to take the risk on inexperienced tappers so it is difficult to get that initial experience. There are 6 brothers and brothers in law who are keen to do the tapping and countless cousins who would also jump at the chance but none have ever done it. Thankfully the new tappers can all learn and practice on the BIL's trees in 5 years.

As far as spending money goes, I am hoping the future costs over the next few years wont be too excessive. I am thinking 150k baht for trees (34 rai * 75 trees/rai * 45 baht/tree +10% replanting + 25k planting labour), and about 50k baht/year for fertilizer. All the labour should be free until we start tapping. I have told the family they can intercrop the trees for the first 3 years after they are planted with trees, in return for looking after the trees until they start to produce. We have already discussed that the trees take priority over the intercrop though and that they can't put anything like cassava in that would starve the trees of nutrients and water.

If you are willing to train the tappers I may have some interested hands for you, not sure how many would want to relocate though as they seem to be homebodies and most are married with young kids.

Still looking for feedback, opinions, advice.....

Hi again

I wouldn't be worrying about tappers yet, you have a long way to go before you will have need. Saying that every major city in rubber areas has training courses for tappers run by the Government. It's not the training or teaching that is the problem, it's the rural Thai aversion to working. They do there rice and that's enough to live so why work.

Cost, well what ever you think it will be multiply by 3. As a safe guide plan to spend about $2000 US per Rai before returns start. Sounds a lot, but the bills will roll in for things you never thought of. One guy wrote to me about starting a very big plantation and was debating the costs. He sent me a list of what he thought costs would be and he had not even factored in the price of a tractor. Believe me it will cost.

Last year we had about 5 visitors come up and look around as they were planing to grow rubber and wanted to get a real picture of what was involved. Of those only one went head and he didn;t plant just bought a working plantation.

You are welcome to come and have a look for yourself anytime. Best of luck if you commit. Jim

[Dakling]

Thanks again on the input, I didn't know about the training courses but it makes sense.

I am pretty much decided that I want to go forward with the plantation. I will be doing my best to keep costs down up front, but we shall see how it all goes.

I would like to take you up on your kind offer of a tour at some point but I am uncertain when I am going to be back in Thailand. I will try get out your way sometime in the new year.

Currently my primary involvement is as the ATM but I intend to get more involved once I am in the country. My primary concern in the short term is to keep the tree count per rai to a reasonable level as local wisdom appears to be to plant them much denser than recommended. My plan to try control that is to only provide enough cash to buy 75 trees per rai. I hope to not learn everything the hard way but I am sure there will be a few lessons along the way.

[jamescollister]

Thanks again on the input, I didn't know about the training courses but it makes sense.

I am pretty much decided that I want to go forward with the plantation. I will be doing my best to keep costs down up front, but we shall see how it all goes.

I would like to take you up on your kind offer of a tour at some point but I am uncertain when I am going to be back in Thailand. I will try get out your way sometime in the new year.

Currently my primary involvement is as the ATM but I intend to get more involved once I am in the country. My primary concern in the short term is to keep the tree count per rai to a reasonable level as local wisdom appears to be to plant them much denser than recommended. My plan to try control that is to only provide enough cash to buy 75 trees per rai. I hope to not learn everything the hard way but I am sure there will be a few lessons along the way.

Come for a few days anytime, I'm not going anywhere. Check out the Malay and Indain rubber sites, they are in English and may be of some good. Don't ask me for the web sites I have no idea, I just surfed the web over the years finding bits here and there. Best of luck. Jim

[SGD]

.... If your wifes family is left in charge, no matter how honest, loyal and trustworthy they are, they will do things the Thai way not the right way. Then you will get Thai returns, not good well run plantation returns....

Ain't that the truth !

Even if you can show them evidence of doing it one way and producing more, they will just put that down to "magic" or other such nonsense and then go back to their way and produce half what you did !

Just one other thing and I read this often that the family will take care of the trees so that after 7 years they can tap and get a share, if they are so keen to tap rubber for 40% they can come here and tap. I am 2 tappers short and am not the only plantation that can;t get tappers. Think hard before you start spending. Jim

Very, very good point. I was shocked at how much was being spent on this facet of production but as usual, they can't be arsed.

... It's not the training or teaching that is the problem, it's the rural Thai aversion to working. They do there rice and that's enough to live so why work.....

Ditto

[Dakling]

In my efforts to further educate myself, I found a couple of online articles about rubber production people may or may not be interested in. Thought I would post the links just in case.

Thesis on small monocrop rubber holdings

Thesis on rubber farms in East and Northeast Thailand

Paper on immiture rubber tree practices in Vietnam

Paper on intercropping mature trees with low light livestock forage

Photos of a family rubber operation in Rayong

Odd responce paper re: rubber farms in NE Thaialnd.

Another Issan based paper

Rubber technology developments in issan

A guys blog from Udon Thani with some homegrown rubber economics.

Some of these have limited value (the technology one for instance), and I hope the guy with the blog doesn't mind my linking to it. In any event I hope some folks find some value in these links I generally found a new learning or two in most of them. On the other hand I don't really have a clue what I am on about ........

[thunder30101]

I think most people I see posting info for rubber and other "hot" crops now such as yourself would be much better off buying the land, preparing it and planting the trees, then after 2-3 years sell it for a profit on the trees value alone with a little profit on the increase in land value. Thailand is littered with good intentions, dreams and empty bank accounts.

[Dakling]

That's always an option though I am more interested in giving it a shot. My wife and I have already discussed selling the land if things go sideways. Thus far I am having fun with it, when it is no longer fun we will look at selling. I don't plan on this being my support in my old age or anything, I am pretty well sorted as far as that goes. This rubber endeavor is more something to keep the in-laws busy and to give me something to do. If it turns out to be a nice little supplemental earner on the side that's just a bonus. Having said all that I do like to do things the right way when I can which is why I got involved in this forum amongst other things.