Best Investment To Make In Farming In Isaan ?

[David Peters]

At last. File attached of gross margin tables.

Not sure if the rice and the cassava figures are accurate.

Estimated costs and gross and net income.doc

[somo]

Please delete all the above tables they are so hard to make sense of.

If anyone really wants to know my costs in detail I will gladly publish them here in a

version more easy on the eye.

[jamescollister]

Please delete all the above tables they are so hard to make sense of.

If anyone really wants to know my costs in detail I will gladly publish them here in a

version more easy on the eye.

Somo, Steve, it's a farmers forum real name won't hurt. Anyway I have no real interest in cassava, but after my small attempt at growing it some years ago. Seem to remember I left it to rot in the field, if recollection is right the price dropped to 50 satang a kilo. Now that was for the buyers to harvest themselves, When I worked it out I would have been on a loser if we had done the work ourselves. Things go up and things go down, if I knew tomorrows prices I would be a rich man.

So question I have, is how many crops have you done and have you factored in down turns or years like last year where many cassava crops round here were a right of due to rain, they rotted in the ground.

Can understand your numbers when all is good, but as anyone involved with any sort of farming knows, weather and markets dictate the outcome. So say over a say 10 year period taking into account good prices, bad prices, weather etc how would they look. Jim

Edited July 22, 2012 by jamescollister

[Gary A]

Somo, It appears that most of the guys are too polite to say that you are full of shit. I guess that I must be the first. If farming here in Thailand were easy and profits could be made being an absentee farmer everyone would be doing it. I live here and my wife is an active farmer. She works her little butt off for very little other than subsistence wages.

I wouldn't say this except that I worry that rookies will believe you and put their life savings into a losing proposition. It takes a major amount of physical labor and complete dedication to eke a living out of a Thai farm.

[somo]

Please delete all the above tables they are so hard to make sense of.

If anyone really wants to know my costs in detail I will gladly publish them here in a

version more easy on the eye.

Somo, Steve, it's a farmers forum real name won't hurt. Anyway I have no real interest in cassava, but after my small attempt at growing it some years ago. Seem to remember I left it to rot in the field, if recollection is right the price dropped to 50 satang a kilo. Now that was for the buyers to harvest themselves, When I worked it out I would have been on a loser if we had done the work ourselves. Things go up and things go down, if I knew tomorrows prices I would be a rich man.

So question I have, is how many crops have you done and have you factored in down turns or years like last year where many cassava crops round here were a right of due to rain, they rotted in the ground.

Can understand your numbers when all is good, but as anyone involved with any sort of farming knows, weather and markets dictate the outcome. So say over a say 10 year period taking into account good prices, bad prices, weather etc how would they look. Jim

I can only say that over 4+ years i have experienced good and bad. The good being a price of nearly 4 Baht/kilo and the bad being when mealy bug hit us and really hit yields badly. On balance we have produced the profits I have already written about.

Edited July 22, 2012 by somo

[somo]

Somo, It appears that most of the guys are too polite to say that you are full of shit. I guess that I must be the first. If farming here in Thailand were easy and profits could be made being an absentee farmer everyone would be doing it. I live here and my wife is an active farmer. She works her little butt off for very little other than subsistence wages.

I wouldn't say this except that I worry that rookies will believe you and put their life savings into a losing proposition. It takes a major amount of physical labor and complete dedication to eke a living out of a Thai farm.

It is you who are perhaps in the shit. There is no need to get into insults but i can do that if you wish.

I do feel for you. you should not let your wife work for subsistence wages - shame on you. Please justify your full of shit claims. I have spelled out how I operate and if you choose not to believe me then that is up to you but you have given no reason for doing so. it is now your turn to spell out how you operate and manage to fail.

It seems I am drawing the losers out of the woodwork here but what the heck. Write down the numbers you think are accurate regarding cassava production and specify how they conflict with mine.

[jamescollister]

Please delete all the above tables they are so hard to make sense of.

If anyone really wants to know my costs in detail I will gladly publish them here in a

version more easy on the eye.

Somo, Steve, it's a farmers forum real name won't hurt. Anyway I have no real interest in cassava, but after my small attempt at growing it some years ago. Seem to remember I left it to rot in the field, if recollection is right the price dropped to 50 satang a kilo. Now that was for the buyers to harvest themselves, When I worked it out I would have been on a loser if we had done the work ourselves. Things go up and things go down, if I knew tomorrows prices I would be a rich man.

So question I have, is how many crops have you done and have you factored in down turns or years like last year where many cassava crops round here were a right of due to rain, they rotted in the ground.

Can understand your numbers when all is good, but as anyone involved with any sort of farming knows, weather and markets dictate the outcome. So say over a say 10 year period taking into account good prices, bad prices, weather etc how would they look. Jim

I can only say that over 4+ years i have experienced good and bad. The good being a price of nearly 4 Baht/kilo and the bad being when mealy bug hit us and really hit yields badly. On balance we have produced the profits I have already written about.

A fair answer, so you missed the big drop in prices by about a year, I think. Good timing on your part or just good luck. All the best with it and if you you are growing up this way maybe you could host one of the farmers meetings and we could lean about how you do it. Jim

[Mark1971]

Any Farang investing everything they have in an Isaan farm they can never legally own & relying on this as their only source of income is taking a major risk in my opinion.

That is not to say it can't work out well, as Jim and others on here have proved.

However there are so many things that can go wrong (Not only with the farming, but also with your personal relationships), it is probably the exception that make this a reliable sole source of income for 10, 20 or 30 years.

Personally I find the farming forum very interesting, however when I retire any income from farming in Thailand will be purely supplemental.

Edited July 22, 2012 by Mark1971

[somo]

Me I am off to sleep so waking afresh and ready to do battle with all you cynics in the morning.

Sticks and stones etc

zzzzzzzzzzzzzzz

[jamescollister]

Any Farang investing everything they have in an Isaan farm they can never legally own & relying on this as their only source of income is taking a major risk in my opinion.

That is not to say it can't work out well, as Jim and others on here have proved.

However there are so many things that can go wrong (Not only with the farming, but also with your personal relationships), it is probably the exception that make this a reliable sole source of income for 10, 20 or 30 years.

Personally I find the farming forum very interesting, however when I retire any income from farming in Thailand will be purely supplemental.

Very true what you say, but I work on the assumption that if things went bad family wise with a wife and 2 kids I would be screwed anywhere in the world. No matter how I look at it I am up that creek without a paddle. Worst comes to worse, I have little hair now and the Buddha monk life awaits. Jim

[loong]

If I remember correctly from the pinned cassava thread, Somo started cassava farming with little knowledge and no experience. I am sure that he is thankful for the excellent posts by Khonwan that I am sure shortened the learning curve for him.

Unfortunately, Khonwan no longer posts, I'm not sure of the exact reasons, but it may have something to do with similar posts to those that I see in this thread aimed at Somo.

This is one of the sensible forums on TV, please don't let it degenerate into one where valued members start hurling insults at each other. It would be a shame to lose any more members who are willing to share their experiences and help those of us that are new to this.

I believe that in one of Somo's posts in this thread he says that he has a good team who do the work for him. This is p[robably the most important aspect of his absentee farming. A good team will enable a profit whereas a useless team will possibly ensure a loss.

I don't think that it is easy to assemble a good team, it either requires luck or a certain amount of overseeing to cut the deadwood.

Earlier this year. my FIL suggested that we rent some available cassava land. Obviously, we would finance it and the family will do the work. We took over the land at the beginning of May. How many man days has the family put in? Apart from BIL - Zero. If I ask my BIL to do something (he has another job) he will be there at first light and work until he has to go to his job. He will be back in the evening and work til dark. I wish that I had enough work to employ him full time as he would be such an asset.

So we have had to use local labour. It is difficult to assemble a team when you are only employing on a "as needed" basis. What soon becomes obvious is that either the locals have no idea what they are doing, either that or they simply can't be bothered to do it right - after all it's not their profit at risk. It seems that their only interest is maximum return for minimum effort. The tradition of supplying food for workers is something that needs to be knocked on the head. Some people were showing and working for a couple of hours and expecting to be fed. We were paying for hand weeding per row, but food costs were adding as much as 25% to the labour cost. Obviously this is no good.

I was in the UK when the first 6 rai of land was prepared and planted. Pre-emergence herbicide was used, but it obviously didn't work very well, hence the problem and associated costs with weed control. It is obvious to me that either the wrong herbicide was used or the sprayer maybe only used it at a reduced dilution and pocketed some of the herbicide for use elsewhere.

The final 2 rai were planted 2 and a half weeks ago. Mostly, they are growing quite well, but there are long runs with no growth at all. Puzzled by this, I do some investigation and what do I find? Some of the setts were cut about 15Cm long with a little as 2 Cm actually in the soil. Maybe the soil was hard and it was difficult to push the setts in, but that is no excuse.

I am new to this and I am learning from my mistakes and one of the biggest mistakes is believing that the locals know what to do and will do anything like a decent job. It will take time, but hopefully I will eventually know who does the best work and so who to offer work to as/when it becomes available. It has been frustrating, but if we continue with this for a second year, my knowledge base will have increased a lot, not only regarding the crop, but management, overseeing a labour force that seem intent on reducing profitability potential to zero!.

[David48]

Me I am off to sleep so waking afresh and ready to do battle with all you cynics in the morning.

Sticks and stones etc

zzzzzzzzzzzzzzz

Hey somo ... hope you slept well.

Just a small consideration.

This is a Tread started by a bloke who wanted some serious replies to his question.

You have some valid claims to make and some here may wish to refute them.

So the OP feels that his Thread isn't hijacked, maybe you could start your own thread as OP about your Farming methods.

I am sure that it will be well read and hotly debated.

Not trying to sound like the old head here (actually, I'm probably one of the youngest) but it's only out of fairness to the OP.

Maybe you would like to continue over in the Pinned Thread on Growing Cassava in Thailand here.

[somo]

Me I am off to sleep so waking afresh and ready to do battle with all you cynics in the morning.

Sticks and stones etc

zzzzzzzzzzzzzzz

Hey somo ... hope you slept well.

Just a small consideration.

This is a Tread started by a bloke who wanted some serious replies to his question.

You have some valid claims to make and some here may wish to refute them.

So the OP feels that his Thread isn't hijacked, maybe you could start your own thread as OP about your Farming methods.

I am sure that it will be well read and hotly debated.

Not trying to sound like the old head here (actually, I'm probably one of the youngest) but it's only out of fairness to the OP.

Maybe you would like to continue over in the Pinned Thread on Growing Cassava in Thailand here.

Out of fairness to the OP I'll stay here thanks. He needs a counterbalance to all the negative stuff.

[somo]

Jim.

Sorry but hosting a farmers meeting is really not my thing. Anyway there is nothing to see in terms of "a farm"

We have a nice house in the village and then there are fields of cassava all around a few rai of which are mine.

I am more than happy to welcome any passing/lost/stray farang to my home for a beer but that is hard to plan as I am there sporadically.

Loong

You are right, getting a good team together is crucial. Plus experience in costing jobs.

For example I can look at a field of cassava that needs weeds spraying and know the total cost to within a few hundred Baht.

I can later telephone my guys and send them the money to get the job done. I week or two later I can easily check if they have done it properly.

The beauty of cassava is that once planted other than some weeding there is nothing to do other than watch it grow

[Gary A]

My Thai wife is 45 years old and I feel bad when she comes home all muddy with her little butt dragging. For at least the past five years I have been trying to talk her out of actively farming. It is nearly impossible to hire decent help so my wife and about five of her friends have formed a little co-op. They seldom hire help and when they do, the workers must keep up with the co-op ladies. Most of the hired help doesn't last long. My wife says that few are worth the 300 baht per day plus meals that they demand.

The year before last she sold her sugar cans standing. I was pleased about that but then she ended up helping the buyer cut it. Of course he paid her for her labor and she was satisfied. Just a few years ago it was easy to hire help but for whatever reason those days are gone. The only benefit I can see is that my 45 kg wife is very fit. The 20 rai certainly wouldn't support us. Of course she could get along just fine with that income without me.

There are always unforseen problems. Lack of rain, too much rain and this year a new problem. Some of her sugar cane is infested with termites. As I have said, I certainly wouldn't want to depend on the farm income to live here. I'm not a wealthy man but I am comfortable. If she sold both small farms tomorrow, I'd be quite happy. Last year with the very heavy rains, one of the fish ponds overflowed and she was out in the mud gathering fish from the rice paddies and sugar cane. A couple or maybe three years ago her chickens and ducks were sick and dying. She ended up having to kill and bury them all. There were probably about sixty of them.

Edited July 23, 2012 by Gary A

[cdmtdm]

To the OP , do your own research and find something that suits then go for it ... back in Oz i was not a farmer but against all the people in the know i purchased a farm ... it was one of the most pleasurable and profitable times of my life , the key was not to think like a farmer , its a business so think like a business man .... think outside the square ... i am setting up at the moment in Nong Khai area PM me if u want more info

cheers and goodluck

[David Peters]

Up in Mukdahan and Roi-et, farmers in some villages have turned their backs on growing cassava. They are now producing grass seed and making an annual net profit of more than 10,000 baht/rai. They grow a range of grass species. I posted about this in an earlier topic last month but no one was interested.

I was interested and asked you in the other thread what grass you were referring to, but you didn't reply.

Sorry about that. I don't open this forum every day and I guess I missed it.

From talking to the farmers they are growing a hybrid called Mulato 2 in Roi-et and a large guinea grass called Mombasa in Mukdahan.

[somo]

I have made some enquiries which have produced some good and interesting info.

Below is the first email I had back.

Dear Steve,

We manage and run an international forage seed business from the Faculty of Agriculture, Ubon Ratchathani University through a Mexican Seed Company Tropical Seeds. You contacted Tropical Seeds on their website.

This year we have contracted 502 farmers in Mukdahan province, 108 farmers in Roi-et province, 23 farmers in Amnart Charoen province, 30 farmers in Ubon Ratchathani province and 634 farmers in northern Lao to hopefully produce over 200,000 kg of high quality forage seeds of six species.

This year we have exported seeds to China, Vietnam, Lao, Cambodia, Malaysia, Vanuatu, New Caledonia, Papua New Guinea, Kenya, Ethiopia, Congo, Uganda, Guatemala and Mexico.

We are expanding all the time and always looking for more good farmer growers in Thailand.

We have not had any production from Chaiyaphum though I did work in that province in the 1970s.

All of our species grow well on land that has grown cassava. However, wet soils that water-log are not suitable. Well drained upland soils are the best.

This year is too late to grow a seed crop.

We have full quotas for 4 of our species but our two biggest species by sales volume, Mulato II and Mombasa, can expand.

They are perennials.

If you are thinking about trying grass seed production there are risks. No risk of prices as they are fixed and guaranteed. But risks from weather, particularly during flowering and seed set in October-November, when strong winds or heavy thunderstorms can knock seed out before harvest. There are no insect pests or diseases in our crops. No spraying is necessary. Only fertiliser needs to be applied but far less than the amounts applied to cassava.

I will attach a few photos of the production cycle.

1 nurseries are planted in May-June. We give out free seed.

2 In late June-July, the seedlings with strong roots are transplanted to the seed fields and planted in rows 1 m apart and 50 cm down the row. There are variations on planting density but no need to discuss these details yet.

3 Weed

4 At anthesis in early October (mombasa guinea) tie the seed heads together. As soon as the seed starts to shed, knock the seed out of the seedheads into large trays. This must be done every day. No time to waste here. Harvesting is all over in 10-14 days.

5 Each day dry the seed inside in the shade. After 4-5 days slow drying the seed can be sun-dried for another 3-4 days.

6 Then clean the seed. We provide free seed cleaners to large farmer groups but not to just one farmer.

7 When the seed is dry and clean we come to the village to buy with cash your seed, Usually in Nov-Dec.

With Mulato II our seed growers prefer to let the seed fall to the ground. This is because Mulato II seed harvesting occurs at the same time as rice harvesting. After rice harvest, the farmers cut the vegetation back and sweep the seed from the ground. No big hurry as usually no rain falls in Dec-Feb. We buy clean Mulato II seed in February.

Thank you for your interest.

Be free to contact me any time or come and visit us in Ubon to see seed crops for yourself.

Kind regards,

Michael

Michael D Hare,

Professor,

Ubon Forage Seeds,

Faculty of Agriculture,

Ubon Ratchathani University,

Thailand 34190.

[somo]

I then enquired about the economics of it and got this back

Dear Steve,

I am not familiar with Thai visa forum but I have no problems with publication of our work and contact details in Ubon.

We are always trying to sell more seed and get increased production.

For me, being an academic, this venture into commercial seed production has proven challenging. Since my wife of 28 years died 5 years ago, new doors have opened for me.

I am a NZer but fully committed to continuing to work in northeast Thailand forever. Fortunately I am a permanent residence and so do not have to worry about visas and 3 month reporting in.

On to the economics of grass seed production.

I will just present details on Mulato II and Mombasa as these are the two major species that we need more seed from.

1 Mulato II Last year yields were down on previous years due to the continual overcast and wet days during flowering in Oct-Nov. The average yield was 53 kg/rai from 205 rai by 58 farmers. They were paid 180 baht/kg, which comes to 9540 baht/rai. In 2010 the average yield was 80 kg/rai giving a gross income of 14,400 baht/rai. costs (fertiliser, labour etc) are about 2,800 baht/rai.

2 Mombasa guinea Last year yields were also down for the same reasons. The average yield was 50 kg/rai from 427 rai by 166 farmers. They were paid 100 baht/kg giving them 5,000 baht/rai gross. In 2010, the average yield was 80 kg/rai; 8,000 baht/rai. Costs are about the same for Mulato II being 2,800 baht/rai.

These are average yields across all our seed growers. The good farmers produce over 100 kg/rai from both species.

The Mukdahan and Roi-et farmers do not like cassava. With the Mukdahan farmes, another factor is that most of their farm areas are up hills and down valleys and access to get cassava out is too difficult.

We sign new season contracts every March and distribute seed for nurseries. We are a hands-on operation with 6 week visits to the villages to check on progress and advise farmers on any problems. We try to inspect as many fields as possible before harvest.

Grass seed production is not for absentee farmers nor for farmers that like to hire labour. It is best suited to a family operation.

I could say a lot more but this may be enough to go on at the moment.

This afternoon we are sending 4,000 kg to Hainan and orders have just come in for 300 kg to PNG and 750 kg to Kenya.

It is also great to have a agricultural business going that it not interfered with by the government, unlike rice (read today's Bangkok Post) and cassava.

One last point. Mombasa and Mulato II are perennials. After seed harvest, graze or cut the stalky vegetation down and you will get good fresh grass during the dry season. You can fed your own cattle or sell fresh grass to other farmers if there is a fresh grass market like in other areas in northeast Thailand.

Thank you for your interest.

Kind regards,

Michael

This is not going to be for me (being a lazy absentee farmer ) but the OP or others may want to look at it further.

If you want Michael,s contact details PM me

[David48]

Probably good information but I will bluntly say that it is definitely the wrong thread to post it in.

I am sure that you have noticed that the OP has not rejoined the conversation after the OP.

How about placing that information in a separate thread so that the people who visit this Forum, searching for good information will have access to it.

If you decide not to take that action, may I reproduce the threads with a nod to you?

But, definitely I would prefer that you ‘owned’ it.

We all know the productive benefits of a Farming Co-Op … maybe we can co-operate on this matter … what you say somo?

[David Peters]

Probably good information but I will bluntly say that it is definitely the wrong thread to post it in.

I am sure that you have noticed that the OP has not rejoined the conversation after the OP.

How about placing that information in a separate thread so that the people who visit this Forum, searching for good information will have access to it.

If you decide not to take that action, may I reproduce the threads with a nod to you?

But, definitely I would prefer that you ‘owned’ it.

We all know the productive benefits of a Farming Co-Op … maybe we can co-operate on this matter … what you say somo?

Thank you for this information. So now I know where the farmers in Mukdahan sell their seed to. I started a thread on this subject "Grass seed farming and grass farming" in June. It received no relies. I doubt if there is any interest at all out there in the farming world.among people that read this forum.

[loong]

i must have missed that thread at the time although I have seen your references re gras in other threads.

I've read it now

Maybe a good idea for Somo to reproduce his above replies in that thread.

[Gary A]

Harvesting grass seed must be a nightmare. The threshers here blow a lot of rice out of the machine and grass seed would be much smaller and lighter than rice.

Edited July 27, 2012 by Gary A

[David48]

Probably good information but I will bluntly say that it is definitely the wrong thread to post it in.

We all know the productive benefits of a Farming Co-Op … maybe we can co-operate on this matter … what you say somo?

Thank you for this information. So now I know where the farmers in Mukdahan sell their seed to. I started a thread on this subject "Grass seed farming and grass farming" in June. It received no relies. I doubt if there is any interest at all out there in the farming world.among people that read this forum.

To David Peters ... I wasn't me who made the posts ... it was somo.

Maybe it would be great if you contacted somo and got him to re-post on your Thread.

i must have missed that thread at the time although I have seen your references re gras in other threads.

I've read it now

http://www.thaivisa....-grass-farming/

Maybe a good idea for Somo to reproduce his above replies in that thread.

What he said ...

.

[David Peters]

Harvesting grass seed must be a nightmare. The threshers here blow a lot of rice out of the machine and grass seed would be much smaller and lighter than rice.

I am informed that no machinery is used. All hand harvesting

[somo]

Have copied to grass thread. Everybody happy?

[JurgenG]

To the OP , do your own research and find something that suits then go for it ... back in Oz i was not a farmer but against all the people in the know i purchased a farm ... it was one of the most pleasurable and profitable times of my life , the key was not to think like a farmer , its a business so think like a business man .... think outside the square ... i am setting up at the moment in Nong Khai area PM me if u want more info

cheers and goodluck

Agree with you. Nowadays, there is only two ways to look at farming : agribusiness or hobby farming. Back home or in Isaan it's the same, successful people more often than not have some kind of related advance degrees.

The other kind of people you find in the village are people like my parents generation, or even mine, who have been raised in a farm, left to work in the city and after retirement come back to the village. But they see farming as a hobby and not as a primary source of income.

[klubex99]

Now I might not be the sharpest knife in the drawer,but I have real troubles reconciling somo,s stated profit margins.

From his figures it costs approx 4000 baht/rai to plant and grow his cassava,plus 2000 baht harvesting cost.

His return is 10,000 baht or 4000baht "profit"BUT ,it then costs the 4000 baht "profit "to plant and grow the next seasons crop,so there is no retained profit.

To my mind this is a dog chasing its tail scenario and the only time you could show a retained profit is the time you do not replant another crop.

Renting land , owning no equipment and relying on hiring labour and equipment means you have virtually no control over costs and certainly none over commodity prices..

You may well be right about yourself.

It ain't rocket science. It costs me 5.500 to produce and I sell it for 10,000 = 4,500 profit.

Or to put it another way. Once I sell for 10,000 I pay the 2000 costs of harvesting leaving me 8,000.

I put 4,500 in my pocket and the other 3,500 is used for the next harvest. Got it?

Renting land for ay B800/year is usually a cheaper option than buying it.

My tractor expenses are 36,000/year so why spend a million baht on buying one?

Spending loads of money on expensive equipment that is not needed is possibly why many farmers struggle.

By hiring rather than buying I am controlling my costs and not throwing money away.

How does hiring rather than buying mean I will have no control over commodity prices?

None of us can control them and spending silly money on capital equipment won't help.

I have to say that I agree 100% with you.

I have heard it mentioned more than once about the profit being used for the next cycle outlay. This is not the case and is a mistake of the person attempting to compute the figures the incorrect way by choosing to use the profit margin to reinvest when the initial outlay recoup is what is used to reinvest and the profit margin is actually exactly that...'profit'. the oputlay margin is recycled every harvest, meaning you are technically only ever paying once and regurgitating that outlay to reap profit every cycle.

You are actually playing the game exactly as it ought to be played. Renting beats buying in a business climate where stability is difficult to achieve. By renting, you never really need to have all your eggs in one basket, you can make yourself flexible as to your location, soil types, climate, labour availability and pretty much anything and everything.

You have the ability to use profits to start saving to buy your own land if land investment is what floats your boat, maybe something to hand to your kids when you shrug off your mortal coil. You may even get a deal to rent with an option to buy as you go along, that way you could end up paying the land owner with money you made from his own land

There are many possibilities if you plan correctly, and you have a good business mind. If market conditions or the natural elements conspire against you, then at least you have the ultimate flexibility to regroup elsewhere and limit any losses. Not so with the owner/farmers who are pretty much stuck to it. If you posess good acumen and approach farming in Thailand with a pure business logic, then it is not hard to make it work with the right conditions, but then again, that is all subject to your ability to assess the conditions for what you want to achieve.

I would say to the OP "Go for it" it is much better to give it a go so that you know, rather than never do it and never know. I wish you the best of luck.

@ Jim.... I might be over this week... what beer do you drink over there?

[Canada]

Now I might not be the sharpest knife in the drawer,but I have real troubles reconciling somo,s stated profit margins.

From his figures it costs approx 4000 baht/rai to plant and grow his cassava,plus 2000 baht harvesting cost.

His return is 10,000 baht or 4000baht "profit"BUT ,it then costs the 4000 baht "profit "to plant and grow the next seasons crop,so there is no retained profit.

To my mind this is a dog chasing its tail scenario and the only time you could show a retained profit is the time you do not replant another crop.

Renting land , owning no equipment and relying on hiring labour and equipment means you have virtually no control over costs and certainly none over commodity prices..

You may well be right about yourself.

It ain't rocket science. It costs me 5.500 to produce and I sell it for 10,000 = 4,500 profit.

Or to put it another way. Once I sell for 10,000 I pay the 2000 costs of harvesting leaving me 8,000.

I put 4,500 in my pocket and the other 3,500 is used for the next harvest. Got it?

Renting land for ay B800/year is usually a cheaper option than buying it.

My tractor expenses are 36,000/year so why spend a million baht on buying one?

Spending loads of money on expensive equipment that is not needed is possibly why many farmers struggle.

By hiring rather than buying I am controlling my costs and not throwing money away.

How does hiring rather than buying mean I will have no control over commodity prices?

None of us can control them and spending silly money on capital equipment won't help.

I have to say that I agree 100% with you.

I have heard it mentioned more than once about the profit being used for the next cycle outlay. This is not the case and is a mistake of the person attempting to compute the figures the incorrect way by choosing to use the profit margin to reinvest when the initial outlay recoup is what is used to reinvest and the profit margin is actually exactly that...'profit'. the oputlay margin is recycled every harvest, meaning you are technically only ever paying once and regurgitating that outlay to reap profit every cycle.

You are actually playing the game exactly as it ought to be played. Renting beats buying in a business climate where stability is difficult to achieve. By renting, you never really need to have all your eggs in one basket, you can make yourself flexible as to your location, soil types, climate, labour availability and pretty much anything and everything.

You have the ability to use profits to start saving to buy your own land if land investment is what floats your boat, maybe something to hand to your kids when you shrug off your mortal coil. You may even get a deal to rent with an option to buy as you go along, that way you could end up paying the land owner with money you made from his own land

There are many possibilities if you plan correctly, and you have a good business mind. If market conditions or the natural elements conspire against you, then at least you have the ultimate flexibility to regroup elsewhere and limit any losses. Not so with the owner/farmers who are pretty much stuck to it. If you posess good acumen and approach farming in Thailand with a pure business logic, then it is not hard to make it work with the right conditions, but then again, that is all subject to your ability to assess the conditions for what you want to achieve.

I would say to the OP "Go for it" it is much better to give it a go so that you know, rather than never do it and never know. I wish you the best of luck.

@ Jim.... I might be over this week... what beer do you drink over there?

One thing to consider in the "renting vs. buying" scenario....... the ever increasing price of land. We have made very good money on our land purchases over the last couple of years. The farming could be a wash and we would still walk away winners if we sold the land.

[BlueSkyCowboy]

JJ 4 mil Baht may sound a lot, but in real terms it is not enough to really do anything big enough to turn a reasonable profit. Things like cassava are hit and miss, one year you win the next you lose.

If the wife's family are farmers, how much land do they farm and how rich are they, there will lie the answer to your question.

Not saying it can't be done, but you need to be smart and know your onions so to speak.

What do you do in the UK and can that skill be used here. You will never get anything going here as an absentee farmer. Best of luck Jim

Jim, I have a great wife, a pharmacist, Issan poor rice farmers daughter but a really industrious woman. We recently bought a down and out pharmacy in Pattaya and she did a great job building it up. We also planted 50 Rai of rubber trees in her hometown. 30 Rai (belong to me, of course) 20 belong to her family. Father is too old to work and it is hard to find labor. We hire a group who weed and fertilize. Now I am going to install an irrigation system and hope that it does not get stolen while I am asleep. Unfortunately, living in Pattaya I feel like my land is on the moon. I will move there for a few months and let the wife work the pharmacy. Under optimum conditions, (good soil, water, fertilizer and pruning etc) 5 yrs is min for this trees to produce. (No way to estimate what the price of rubber will be at that time.) Many Thai farmers have 8 yr old trees that still are too small and do not produce, due to lack of knowledge and Money etc. Fortunately, we have a friend who owns 300 rai and is a horticulturalist. For a new man I would suggest possibly looking into planting Corn, rent land and see what comes. Good luck