Family Planning On Buying Rice Land...

[somo]

Farming is a losing proposition even for thais, most do it to feed the family and sell a little for spending money. With the gov and companies like cp controlling everything from seed to fertilizer to land and market prices farmers dont have a chance.

Feeding the family and making a little spending money is not a losing proposition it is a profit.

The only reason it is not a larger profit is the small amount of land most farmers cultivate.

Double the land and you would more than double the "little spending money" because as you say they are already feeding themselves. It is purely a question of scale.

As it is impossible to just double everyone's land the government should be investing in the farming sector to make it more efficient and improve lives that way.

I have the opportunity to more than double my farm at no financial cost at all.

It would involve adding another woman to my bed as a second wife, and I can just do without the extra effort involved in the extra land to work and the extra woman to endure.

That's very sad. You have my sympathies.

[Rotweiler]

I thank all of you for your responses to my questions. Yes, I fully understand that the family's desire to buy more rice land makes no economic sense whatsoever (yes, they DO plan on using my money, not theirs, but I would assume that is pretty obvious). Here, the reality is renters of sufficient rai (8 or more I am told) can make a good living for their families (knowing full well that at least one son works in a factory in BKK to help out.

I raised this topic for multiple reasons - farmers in this area CAN make a good living if they own sufficient land of their own or can rent irrigated land at a good rate. They CAN NOT add to their holdings at today's prices. The speculation on land is so ridiculous as to be totally immoral. Why? Will rice reach the 2,000$US per tonne required to justify these land prices? Will Bangkok move to Chiang Rai province?

Sigh......

[TommoPhysicist]

Aha, just as I suspected, your money!

Just point out to the family.

1) It is against the law for foreigners to buy land.

2) It is against the law for foreigners to provide Thais with the money to buy land.

3) You do not wish to break any law in Thailand.

4) It is not a reasonable financial investment.

If they continue to press for money I would suggest you start looking for a new family.

Edited September 6, 2012 by TommoPhysicist

[loong]

I have to agree with Tommo.

I bet that if the family had 1 million Bt, the last thing that they would think of buying would be between 1 and 10 rai of rice land.

Of course, the way they are looking at it, they will be getting the land for free, so it doesn't matter how much it costs.

[Michael Hare]

If I were a Thai I would be doing anything I could to get out of rice farming (and many are) .My wife has 8 Rai and makes about ฿20 000.- a year, she doesn't work out fertiliser costs and so on. This works out at ฿2500.- a Rai for a first class product. Very hard work, sleeping out in the fields this year to make sure nobody steals the irrigation equipment.

She has heard of Farangs paying ฿500 000.- for a Rai (Buriram), she too cannot understand prices like this unless some building is planned. They were offering ฿16.2 /Kg yesterday and nobody seemed to be selling. Even this low price is subsidised by the government and could well drop when they get tired of paying billions a year for too much rice.

I run an international forage seed business based here in Ubon Ratchathani. We have to compete with South American seeds and also the price farmers get for cassava here in Thailand. Thus, when I try to calculate a price per kg to pay the farmers I want the Thai farmers to make a minimum of 10,000 baht/rai net after deducting their expenses etc. Unfortunately, our forages will not grow on flooded land used to plant rice so we can not compare our prices with rice prices. Still, receiving 2,500 baht/rai is very very poor indeed.

[aussieruss]

hi all in my isaan family they all lend money from the bank to buy land 1to 5 rail from 30;000_50;000 baht per rai yes they can rent but by doing it this way they have the drive to work harder there not drunks and time wasters ithink they have watched there sister(my wife)go to work every day in Australia and accumulate agood parcel of rai so for these reasons it isgood to buy and as aplus there is something to leave the kids but if you think you are been taken for a ride or just not sure rent and ask for a option to buy becuse the renter has 1St option and you can observe if it is a profitable move or not plus if your new to the family its a good way to see how the family works as a unit for me it was good to buy but for many its unforchently not

Reg Russell

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[jamescollister]

There are many ways at looking at things and person situations will change your views, Does the OP have kids or is planning on kids, there is a big difference between spending for your families future and spending for the wife's families future,

Would your wife spend for your family to have a better life in your home country, if not why, would you. Jim

[David48]

^^ as usual Jim ... a thought provoking comment worthy of reading again ...

[David48]

hi all in my isaan family they all lend money from the bank to buy land 1to 5 rail from 30;000_50;000 baht per rai yes they can rent but by doing it this way they have the drive to work harder there not drunks and time wasters ithink they have watched there sister(my wife)go to work every day in Australia and accumulate agood parcel of rai so for these reasons it isgood to buy and as aplus there is something to leave the kids but if you think you are been taken for a ride or just not sure rent and ask for a option to buy becuse the renter has 1St option and you can observe if it is a profitable move or not plus if your new to the family its a good way to see how the family works as a unit for me it was good to buy but for many its unforchently not

Reg Russell

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Can someone run this through a translater and I can't understand it in it's present form?

The poster has connection to the rice community in Issan ... so a worthy comment to make.

[cooked]

Sorry, I understand it well enough.

[Khonwan]

I understood you too, Russell. For David’s benefit:

Members of his family in Issan are borrowing from a bank to buy between land (1-5 rai) at prices from Bt30k to Bt50k per rai. They can rent but they want to buy; they are hard workers, as opposed to drunk and/or lazy, and have witnessed Russell’s wife (their sister) working hard in Australia and accumulating good parcels of land; they believe it better to buy land to hand down to their children. If the OP thinks he is being taken advantage of, better that he first rent, with an option to buy if possible, as then he will see how the family operate.

Rgds

Khonwan

[aussieruss]

Thanks khonwan:rolleyes:

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[Khonwan]

You’re welcome Russell.

Too late to edit my post: ignore the erroneous word “between” in the first line please.

Rgds

Khonwan

[Phronesis]

"how the heck can rice land prices in the hundred's of thousands be justified?"

The answer to the OPs question is very simple and has nothing to do with rice, rice prices, or farming practices.

The property markets of the US and many other western countries have recently crashed. Some areas such as Florida more than 60 percent.

The root cause was access to easy credit.

With the assistance or Thaksin, and now his sibling, easy credit is now readily available in Thailand.

Anyone one that wants to claim this isn't the case must first explain to me why there are so many new pickup trucks in every village.

The current ludicrous prices for Thai property are nothing more than a Ponzi scheme that is founded on easy credit.

Thailand is set for a show stopping property crash. AND it is going to be a doozy...

[pigeonjake]

i will just say another thing on this thred,, i do agree that paddy land shouldnt go for the amounts mentioned on here, 25,000, 30,000, would be about right,

but you put that same bit of paddy land at the side of a busy road,,,??? what then,, like so many members have said on here its all about location,, yes land that has no road way to it no electric to it, would be worth 25k, but next to a road have a think about it,

just my thoughts,, jake

Edited September 7, 2012 by pigeonjake

[jamescollister]

The land price debate will never end, so there will never be a cut and dry answer.

Now if you take away personal views etc, in this global economy, given similar infrastructure and similar futility, should land not be similarr in price any where in the world. To say that Thailand is a poor country and land prices should be less, is like saying gold should be cheaper here than in the west. After all a carrot is a carrot and is really of the same value anywhere [minus taxes etc] So how much is good land worth where you come from. Just a thought. Jim

[MESmith]

i will just say another thing on this thred,, i do agree that paddy land shouldnt go for the amounts mentioned on here, 25,000, 30,000, would be about right,

but you put that same bit of paddy land at the side of a busy road,,,??? what then,, like so many members have said on here its all about location,, yes land that has no road way to it no electric to it, would be worth 25k, but next to a road have a think about it,

just my thoughts,, jake

The "inaccessible land" can be bought up & excavated for fill, to build up the land nearer the roads that is to be developed. Where there's muck, there's brass

[maprao]

I am sure glad that I agreed for my wife to buy her farm (with my money) when the paddy land was 5k a Rai!

Edited September 7, 2012 by maprao

[Phronesis]

After all a carrot is a carrot and is really of the same value anywhere [minus taxes etc] So how much is good land worth where you come from. Just a thought. Jim

Jim

The country that I come from is Australia. And it currently has the biggest property bubble in the world. It is in the process of popping as I type...and the ensuing crash...or slow deflation...is going to be a once in a generation disaster for most Aussies. Some 75 percent of all personal wealth in Australia is in residential property and it must crash some 50 to 60 percent to revert to mean. That means that the collective net worth of Australia will be wiped out by more than a half.

Lots of relevant articles and discussion on the pending Australian property disaster here:

http://bubblepedia.net.au/tiki-index.php

For many expats living here, Thailand's pending property crash will not effect them too much. Even though the value of their land may be reduce by more than 50 percent, most had to pay cash up front and so there are no bank borrowings....and thus negative equity (an upside down mortgage), to struggle with. Many of you older English blokes will know exactly what I am talking about when I mention negative equity because you where stung when you were younger during Thatcher's right to buy policy period. Many young English families had to walk away from there flat because the value of it plunged below the amount outstanding on the mortgage. Most American's posting here are also well aware of the US disaster they playfully refer to as "Jingle Mail".

Although expats here may espcape the Thai property crash because they have not borrowed to puchase, the same does not apply for the emerging Thai middle class. They have borrowed up to the hilt with no money down and 100%LVR property loans.

There now exists a massive sub prime mortgage bubble in Thailand. And exactly the same thing will happen here as happened in the US.

If you have paid cash for your Thai property...and you can use it to grow carrots like Jim does...you may choose to weather the storm on the horizon.

If you have borrowed to buy your Thai property...SELL NOW.

[aussieruss]

Hi all I'll try again hang in there Dave:wacko: my wife brought 10rai used for rice for 25000per rai there were no roads to it only walk in itis 50metres from the main road then 5rai came upfor sale that joined the 10rai to the main road so I brought it for 150000per rai that was 3years ago it is still used for rice today and will be for 2more years till i retire then i will fill with 1meter of soil so I can build something no more rice rai !today i would not sell the 15 rai for 250000 per rai it's for my 3girls future plus mine to play on the dozer for a while so as James sead there is many ways to look at it kids make the difference reg Russell

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[TommoPhysicist]

The land price debate will never end, so there will never be a cut and dry answer.

Now if you take away personal views etc, in this global economy, given similar infrastructure and similar futility, should land not be similarr in price any where in the world. To say that Thailand is a poor country and land prices should be less, is like saying gold should be cheaper here than in the west. After all a carrot is a carrot and is really of the same value anywhere [minus taxes etc] So how much is good land worth where you come from. Just a thought. Jim

Greenbelt farmland (around London) sells for about 1/2 to 1/3 the price of farm land here.

I have an Australian pal trying to sell his farm in Oz, good land, good water supply, not far from a big city. Asking price for 200 acres (500rai) is 400,000 AU$, includes a house ...... no takers in 4 years (that's under 30kbht per rai).

Edited September 7, 2012 by TommoPhysicist

[somo]

Dodgy logic Jim. Thai land is a locally traded asset but gold is internationally traded and

the market for it is very liquid worldwide.

Land prices here are dependent on local demand, supply and availability of mortgages/loans.

As foreigners we tend to think of countries as cheap or expensive in terms of our home currencies.

This is also the wrong way to view things. If next week the Baht collapsed to say 100 to the

dollar we would all be saying how cheap Thailand was but for local farmers and workers nothing has changed.

Most of them never heard of the dollar exchange rate.

For foreigners new tho Thailand land at 100k Baht/rai would seem cheap but for those trying to grow crops the price is still excessive.

Phronesis

Much of what you say is correct but the problem with all bubbles is predicting when they will burst.

They often go on a lot longer than some think because there seem to be an endless supply of fools who keep buying into the myth of eternal growth in prices sold to them by the developers. It could be anywhere between 6 months and 6 years before Bangkok property prices crash.

That they will is certain but it is predicting when that is tricky. "Sell now" may not be the right advice.

A friend of mine lost a lot of money predicting the end of the bubble in internet shares way back. He was right just 5 years ahead of everyone else realizing it. By the time it actually happened he was nearly broke from short selling them.

[jamescollister]

The land price debate will never end, so there will never be a cut and dry answer.

Now if you take away personal views etc, in this global economy, given similar infrastructure and similar futility, should land not be similarr in price any where in the world. To say that Thailand is a poor country and land prices should be less, is like saying gold should be cheaper here than in the west. After all a carrot is a carrot and is really of the same value anywhere [minus taxes etc] So how much is good land worth where you come from. Just a thought. Jim

Greenbelt farmland (around London) sells for about 1/2 to 1/3 the price of farm land here.

I have an Australian pal trying to sell his farm in Oz, good land, good water supply, not far from a big city. Asking price for 200 acres (500rai) is 400,000 AU$, includes a house ...... no takers in 4 years (that's under 30kbht per rai).

You surprise me on the London prices, had a freind many years ago who had, I think about 50 acre dairy farm in Devon and he seemed to make a good living.

As to the OZ farm, [where I am from] 200 acres is really a hobby farm. Most futile land in OZ has been turned in to housing and golf clubs. The rest is more sheep or cattle land, you won't be growing carrots on it.

In saying that I could buy rubber land in the north of OZ cheaper than here, but the Government would take more than it would earn. Australia is now a land of company farming, small farms are a dying breed. Sad in a way that a country that big is now a nett importer of food, not an exporter. Too much regulation and too much tax. Jim

[TommoPhysicist]

You surprise me on the London prices, had a freind many years ago who had, I think about 50 acre dairy farm in Devon and he seemed to make a good living.

Dairy farming in the UK is a totally different game, as you need a permit to produce milk, and they don't make any new ones.

So you have to buy your permit from an existing Dairy farmer getting out of the business.

UK Dairy farming is not about owning a farm or owning cows, it's about owning a permit.

Edited September 7, 2012 by TommoPhysicist

[jamescollister]

Dodgy logic Jim. Thai land is a locally traded asset but gold is internationally traded and

the market for it is very liquid worldwide.

Land prices here are dependent on local demand, supply and availability of mortgages/loans.

As foreigners we tend to think of countries as cheap or expensive in terms of our home currencies.

This is also the wrong way to view things. If next week the Baht collapsed to say 100 to the

dollar we would all be saying how cheap Thailand was but for local farmers and workers nothing has changed.

Most of them never heard of the dollar exchange rate.

For foreigners new tho Thailand land at 100k Baht/rai would seem cheap but for those trying to grow crops the price is still excessive.

Phronesis

Much of what you say is correct but the problem with all bubbles is predicting when they will burst.

They often go on a lot longer than some think because there seem to be an endless supply of fools who keep buying into the myth of eternal growth in prices sold to them by the developers. It could be anywhere between 6 months and 6 years before Bangkok property prices crash.

That they will is certain but it is predicting when that is tricky. "Sell now" may not be the right advice.

A friend of mine lost a lot of money predicting the end of the bubble in internet shares way back. He was right just 5 years ahead of everyone else realizing it. By the time it actually happened he was nearly broke from short selling them.

See what you are saying, but in my case and I think in your case [cassava] prices are set by the international commodities market, in US dollars. So if today I get $4 a kilo, 120 Baht and tomorrow the Baht falls to 100 to the dollar, I will get near on 400 Baht per kilo. Think that's goes for must exports and land prices in local currency will reflect that. Jim

[jamescollister]

You surprise me on the London prices, had a freind many years ago who had, I think about 50 acre dairy farm in Devon and he seemed to make a good living.

Dairy farming in the UK is a totally different game, as you need a permit to produce milk, and they don't make any new ones.

So you have to buy your permit from an existing Dairy farmer getting out of the business.

UK Dairy farming is not about owning a farm or owning cows, it's about owning a permit.

Then just like OZ, over Governed and over regulated. What happened to free enterprise. Jim

[loong]

i will just say another thing on this thred,, i do agree that paddy land shouldnt go for the amounts mentioned on here, 25,000, 30,000, would be about right,

but you put that same bit of paddy land at the side of a busy road,,,??? what then,, like so many members have said on here its all about location,, yes land that has no road way to it no electric to it, would be worth 25k, but next to a road have a think about it,

just my thoughts,, jake

The OP was talking about almost inaccessable land being 100,000 Bt/rai, up to 1 mill in a good location. Ridiculous prices.

[MESmith]

i will just say another thing on this thred,, i do agree that paddy land shouldnt go for the amounts mentioned on here, 25,000, 30,000, would be about right,

but you put that same bit of paddy land at the side of a busy road,,,??? what then,, like so many members have said on here its all about location,, yes land that has no road way to it no electric to it, would be worth 25k, but next to a road have a think about it,

just my thoughts,, jake

The OP was talking about almost inaccessable land being 100,000 Bt/rai, up to 1 mill in a good location. Ridiculous prices.

Around where I live, nr Chiang Mai, people are buying rice paddy at 200 - 300,000 baht per rai, to excavate the soil for building projects.

Edited September 7, 2012 by MESmith

[loong]

"how the heck can rice land prices in the hundred's of thousands be justified?"

The answer to the OPs question is very simple and has nothing to do with rice, rice prices, or farming practices.

The property markets of the US and many other western countries have recently crashed. Some areas such as Florida more than 60 percent.

The root cause was access to easy credit.

With the assistance or Thaksin, and now his sibling, easy credit is now readily available in Thailand.

Anyone one that wants to claim this isn't the case must first explain to me why there are so many new pickup trucks in every village.

The current ludicrous prices for Thai property are nothing more than a Ponzi scheme that is founded on easy credit.

Thailand is set for a show stopping property crash. AND it is going to be a doozy...

From what I have seen, the banks are not in a hurry to foreclose on loans secured on land. This possibly helps to inflate the property bubble, but I don't pretend to be an y sort of expert in economics.

I have known of people who stopped paying their loans off being contacted by the bank 7 years later and then suggesting a way for them to start paying off the loan.

A loan plus interest on the banks books is an asset, whereas if they siezed and sold the property at less than the amound outstanding, it becomes a liability.

I also know of land that was seized by the bank 20 years ago and still owned by the bank. The bank rents it out. That parcel of land the bank would make a profit on if the sold it now.

I would think that if the banks foreclosed and sold all the land that bad debts are secured on at auction. the bubble would definitely burst.

[Mosha]

You surprise me on the London prices, had a freind many years ago who had, I think about 50 acre dairy farm in Devon and he seemed to make a good living.

Dairy farming in the UK is a totally different game, as you need a permit to produce milk, and they don't make any new ones.

So you have to buy your permit from an existing Dairy farmer getting out of the business.

UK Dairy farming is not about owning a farm or owning cows, it's about owning a permit.

Then just like OZ, over Governed and over regulated. What happened to free enterprise. Jim

"1984" All we need is business to be starting the wars. and Orwell will have got it right except for the date.