Rice farmers seek 40% profit margin

[canuckamuck]

Some people will learn to grow other things, or be more efficient - some will go bankrupt. Eventually small farms will disappear, just like everywhere else.

[AnotherOneAmerican]

The western way of farming, hasn't produced good results for western family farmers.

Most of the land is now in the hands of large corporations, and the family farms lost.

Why keep suggesting the same failed notions for Thailand?

[Lancelot]

One way to fund some of the largesse would be to implement property taxes- but that ain't never, ever gonna happen

[djjamie]

Issue the farmers an agricultural ID. They show this ID when purchasing fertilizer, pumps, grain, tractors, ploughs and anything related to farming rice and they get it tax free. Sure, the government won't make any money, but they won't loose over 500 billion either so in a way they will be saving a fortune. This will allow them to turn a profit and encourage some to shift into other agricultural crops that have a higher profit margin. Of course this should be backed up with government programs that train and assist farmers if the decide to change the crops.

Yep it is open to abuse as well, but think of the rice scam then the potential for abuse of this idea pales in comparison.

It ain't no carrot dangled in front of the ballot box, but heay the Junta doesn't need to win votes.

Look no further than Vietnam how a rice program can flourish under a one party system.

Edited June 8, 2014 by djjamie

[jonclark]

If the farmers want a 40% profit margin, then the onus is on them to produce a product that yields that. The onus is not on the tax payer to make up the short fall

I'm sure all businesses from the local somtam stall, to the biggest hotel chains would like a yearly profit margin of 40%, doesn't mean they get it. Perhaps they (businesses) should all lobby government to ensure they get their 40% profit, each and every year?

I think Thailand needs to face reality - rice farming in its current form is not sustainable, its inefficient and uncompetative, This obsession with rice farming is a romantic notion used to reinforce the idea of 'being Thai'

[robblok]

I do not understand why they cannot just take a successful model from another country and implement it here, its not like they arnt used to copying things.. yields here are ridiculously low compared to many other rice growing nations.

They want the easy way.. they don't want to change. There have been many Royal projects helping farmers getting better income. However many are to stubborn to try those that have tried have better income.

Its ok to give farmers some assistance but in the end if they can't produce the product at competitive prices why should the taxpayer foot the bill. First help them change.. but just throwing money at it and letting them do it the old way is crazy. Its a sure way to keep them dependent to whatever political party pays the most.

I am totally against the middle class paying for the refusal of farmers changing their ways or even finding other jobs. If you can (after you have been helped and told how to change) be competitive.. others should not pay for it.

[i claudius]

both my wife and her brother are not bothering to grow rice this year ,both say its just not worth the bother for the amount of money they make out of it.

[robblok]

both my wife and her brother are not bothering to grow rice this year ,both say its just not worth the bother for the amount of money they make out of it.

Then they are smart, less rice production leads to higher prices. Also better quality of rice leads to higher prices.

[Robby nz]

There don't seem to be many posting on this topic who really know much about how things work in the rice farming business.

I live in the on the central plains and get around most days and see how things do work in this area.

Most of the farmers don't own machinery but contract those who do.

For instance possibly one or two people in the area will own a reasonable size tractor with a set of disks, they will contract to disk the dry paddy which will then be flooded by a pump either owned by the farmer or collectively between 2 or more farmers :

Small pump motor.

Mid size pump motor usually floods a bigger area, possibly for more than one farmer

Community owned pump that floods several farmers paddy.

These pumps are driven by a variety of motors from small petrol motors to old tractors :

The paddy is then harrowed and leveled by other contractors using these :

The paddy is then sprayed by other contractors who own the backpack sprayers :

Then, depending on the method used, transplanting seedlings or broadcasting seed farm labor is used.

From there on it is a series of flooding and spraying.

Through to harvest by another contractor :

A builder employs labor to do a job same with a manufacture, same with a farmer.

Unless of course it is only on a very small scale where he and his family do the work themselves but even then they will not own a lot of machinery.

[aljalj]

Ezzra !!(post#6) wake up and smell the coffee !! It's not just Thai farmers who receive much needed government subsidies. Throughout the world food production is of significant importance and the balance between waste and starvation is a delicate one. Take for instance, the many European countries who are paid by their governments to lay their land aside and grow nothing. I'd say it's a far better proposition for the farmer than working in a rice paddy in the blistering heat for people like yourself to enjoy a meal for less than you would pay for a cup of coffee in your own country. Maybe you ought to try it for the 40% plus production cost. I think your blinkered attitude may change somewhat.

[473geo]

Robby NZ

"There don't seem to be many posting on this topic who really know much about how things work in the rice farming business"

[casualbiker]

The rice pledging scheme has ruined the price of rice.. but it's probably a short term blip..to guarantee the price is just following the "I want. You give " attitude that Thaksin used.. decent subsidies on essential farm products (the one's the farmers use) and better training and more cooperatives are the way to go.. hopefully the Armed forces guys can put something together!

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

[canuckamuck]

both my wife and her brother are not bothering to grow rice this year ,both say its just not worth the bother for the amount of money they make out of it.

That's what we did last year, we got someone to rent the field instead and we got a percentage of the rice for our personal use. Unfortunately we couldn't find a renter this year and the family can't conceive of allowing the land to be fallow for a year. So we are wasting our time growing rice once again. Well they are, I have better things to do.

[crazygreg44]

both my wife and her brother are not bothering to grow rice this year ,both say its just not worth the bother for the amount of money they make out of it.

what about telling them to grow it for eating it themselves - they and their families - instead of having to borrow money in order to buy rice ?

Here where I live in the Isaan, most families grow rice for their own cosumption. As rice became more pricey to buy on the local markets, and given the current inflation, it has actually become REALLY worth while to grow your own staple food !

Edited June 8, 2014 by crazygreg44

[ratcatcher]

One thing i dont understand is why small farmers do not work together to buy the expensive machinery , a group can borrow the money more easily and they all can use the machines ,

They did like that in holland like 100 years ago and it worked great

Also with the high price as they propose better have 24/7 look out on the border for rice smugglers

I agree...but unfortunately, these people cannot work together like that....no-one is trustworthy ....the kids even sell off their parents farms.....I don't see how they could work with communal machinery.

Cooperatives are common in many countries.....possibly with education and efficient training programs, it could eventually be viable.

Farmers need to diversify....

Yes diversity is the key. But sometimes there are obstacles to be overcome. Part of the problem is ones land can be surrounded by the land of other family members who are less inclined to change. Your land could be a key part of the water distribution on the family plot and you growing a different crop may need lots of changes to water management. To me it seems simple enough but to them it isn't a good idea!

Looking at organically grown crops it seems like a good idea to reduce the amount of pesticide and herbicide being used, to only use natural fertilizer. Isn't that what farming once was? With our 21st century knowledge, why aren't more people doing it?

Diversity sounds like a good idea.

Thais are smart enough to NOT collectively gatherstheir saving and give it to Farangs (with innocent name like John Deer, etc.). Farang want Thais money, Farangs will have to rob or colonize Thailand, which Farangs have never once succeeded, after many many tries by Portuguese, French, English, Dutch, Japanese, Chinese, Singaporean, and American, etc.

Oh dear chotthee, you do seem to have got the bit between your teeth regarding your idea of farangs. As englishoak pointed out, a slight case of paranoia on overtime.

Surely you understand that farangs are the nasty greedy occidentals of the world and that Japanese, Chinese and Koreans are the nasty, greedy orientals.

Do not labour under the illusion that Thailand has fought off colonization militarily, but has, by careful negotiation and diplomacy maintained its independence for convenience..

Thailand has been colonized by Shell, Exxon, Chevron, Ford, Philips, KFC, Coca Cola, Dairy Queen, 7-11, Pizza Hut and from the oriental side Sony, Samsung, LG, Toyota, Nissan, Honda, Suzuki, Hyundai, Kubota, & Yanmar to name just a few.

Not much chance of Deere John getting a foot in this area mate.

Also bear in mind that the vast majority of Thai major businesses are in the hands of Chinese-Thais like CP Group, Central Group, Thai Bev.

So, go easy on the farang bashing, it's up to Thai farmers and others to work together to try and improve their local area efficiency.

Edited June 8, 2014 by ratcatcher

[robblok]

There don't seem to be many posting on this topic who really know much about how things work in the rice farming business.

I live in the on the central plains and get around most days and see how things do work in this area.

Most of the farmers don't own machinery but contract those who do.

For instance possibly one or two people in the area will own a reasonable size tractor with a set of disks, they will contract to disk the dry paddy which will then be flooded by a pump either owned by the farmer or collectively between 2 or more farmers :

pump small.JPG

Small pump motor.

pump mid.JPG

Mid size pump motor usually floods a bigger area, possibly for more than one farmer

pump big.JPG

Community owned pump that floods several farmers paddy.

These pumps are driven by a variety of motors from small petrol motors to old tractors :

pumping.JPG

The paddy is then harrowed and leveled by other contractors using these :

IMG_4148 paddy.JPG

The paddy is then sprayed by other contractors who own the backpack sprayers :

spray.JPG

Then, depending on the method used, transplanting seedlings or broadcasting seed farm labor is used.

From there on it is a series of flooding and spraying.

Through to harvest by another contractor :

harvest.JPG

A builder employs labor to do a job same with a manufacture, same with a farmer.

Unless of course it is only on a very small scale where he and his family do the work themselves but even then they will not own a lot of machinery.

Robby,

What do they do themselves if almost everything is done by others. Do the contractors ask to much or what ? Maybe the Vietnamese do more by hand or more themselves ?

[billsmart]

One thing that should be taken into consideration when judging the targeted 40% return is the risk involved. The 40% return is for an average year. Some years are a complete failure. Our khow keng crop grown earlier this year yielded virtually no rice because of drought conditions. We lost money and so did all the other rice farmers in our area. That was at a time when everyone was waiting on the Rice Pledge money from the last crop (khow homilee which had yielded a very good return) and the combination ruined some farmers. Farmers are still at the mercy of the weather and I know of no farmers that buy insurance for drought, high winds, torrential rains, pest or blight infestations. It's a high-risk business, or I should say way-of-life.

[crazygreg44]

There don't seem to be many posting on this topic who really know much about how things work in the rice farming business.

I live in the on the central plains and get around most days and see how things do work in this area.

Most of the farmers don't own machinery but contract those who do.

For instance possibly one or two people in the area will own a reasonable size tractor with a set of disks, they will contract to disk the dry paddy which will then be flooded by a pump either owned by the farmer or collectively between 2 or more farmers :

pump small.JPG

Small pump motor.

pump mid.JPG

Mid size pump motor usually floods a bigger area, possibly for more than one farmer

pump big.JPG

Community owned pump that floods several farmers paddy.

These pumps are driven by a variety of motors from small petrol motors to old tractors :

pumping.JPG

The paddy is then harrowed and leveled by other contractors using these :

IMG_4148 paddy.JPG

The paddy is then sprayed by other contractors who own the backpack sprayers :

spray.JPG

Then, depending on the method used, transplanting seedlings or broadcasting seed farm labor is used.

From there on it is a series of flooding and spraying.

Through to harvest by another contractor :

harvest.JPG

A builder employs labor to do a job same with a manufacture, same with a farmer.

Unless of course it is only on a very small scale where he and his family do the work themselves but even then they will not own a lot of machinery.

Robby,

What do they do themselves if almost everything is done by others. Do the contractors ask to much or what ? Maybe the Vietnamese do more by hand or more themselves ?

One machine is still missing from the grand picture show : the tresher. Not cheap.

So if they have to borrow out all these jobs from others, and have to PAY FOR THESE SERVICES a lump sum, my question is same as robbloks plus : How much, or even better, is there ANYTHING left for their profit ?????

[Eric Loh]

Let's face the reality that subsidies are here to stay as long as there are severe income inequality like in Thailand. It's a social contract that the tax payers who benefitted from the state creating the opportunities for them to move up their come ladder should help the less privilege sectors.

Then it is also the question of preventing political and economic challenges. Farmers formed a very large portion of the population and is a serious threat if there are unrests caused farmers hardships. It is also an inflation threat of there are no subsidies or price control.

It is a tricky balance of subsidy reform that need to reduce waste, shrink government outlays, enhance efficiency and productivity plus prevent corruption. Tough act and one Prayuth even if he is really sincere to reform is not enough. The preceding governments will have to follow through the reform for any chance of success.

[worgeordie]

Thats 40% Nett profit they want,very nice if they could get it,do they not

realize,that rice is a world commodity and prices are set on the principle

of supply and demand,any business would be over the moon to have a

40% Nett profit guaranteed by the government.

The Farmers will never improve their situation if they are given hand outs

and guaranteed prices and profit ,while the public have to pay over the top

prices for their daily supply of rice.

regards worgeordie

[Payboy]

I'll gladly let them have a 40% profit margin when they produce rice that tastes like steak.

[allan michaud]

They need education to improve yield so they are competitive with the rest of the rice growing countries. Thailand's yield is around 2.6tons per hectare compared to over 6 in Vietnam. Even Cambodia, still recovering from 4 decades of war produces 2.8tons.

Also the vultures who upped the prices for land rental and chemicals could do with some reeducation from the Junta along with loan sharks.

And as someone else pointed out, laziness is another big problem. Rice farming is all about short bursts of work, they have plenty of time to 'work' to earn more money rather than spend thier time lounging around in hammocks all day drinking Lao Khao.

Stopping these morons from pissing their money up the wall on smart phones they cannot afford is going to be harder though.

For me it is hard to have sympathy with many of these people as they bring much of their poverty on themselves. When i visit my wife's village most of the men are drunk 24-7 it seems and are always on the look out for a free drink. Having slept on the streets on a few occasions due to a lack of money I know what it is like to struggle each day to eat, buying luxury items like smart phones and ipads is just not an option, if I can't afford to eat properly then I certainly am not going to piss it up the wall on drink like far too many Thai men.

[Mudcrab]

There don't seem to be many posting on this topic who really know much about how things work in the rice farming business.

I live in the on the central plains and get around most days and see how things do work in this area.

Most of the farmers don't own machinery but contract those who do.

For instance possibly one or two people in the area will own a reasonable size tractor with a set of disks, they will contract to disk the dry paddy which will then be flooded by a pump either owned by the farmer or collectively between 2 or more farmers :

pump small.JPG

Small pump motor.

pump mid.JPG

Mid size pump motor usually floods a bigger area, possibly for more than one farmer

pump big.JPG

Community owned pump that floods several farmers paddy.

These pumps are driven by a variety of motors from small petrol motors to old tractors :

pumping.JPG

The paddy is then harrowed and leveled by other contractors using these :

IMG_4148 paddy.JPG

The paddy is then sprayed by other contractors who own the backpack sprayers :

spray.JPG

Then, depending on the method used, transplanting seedlings or broadcasting seed farm labor is used.

From there on it is a series of flooding and spraying.

Through to harvest by another contractor :

harvest.JPG

A builder employs labor to do a job same with a manufacture, same with a farmer.

Unless of course it is only on a very small scale where he and his family do the work themselves but even then they will not own a lot of machinery.

Robby,

What do they do themselves if almost everything is done by others. Do the contractors ask to much or what ? Maybe the Vietnamese do more by hand or more themselves ?

One machine is still missing from the grand picture show : the tresher. Not cheap.

So if they have to borrow out all these jobs from others, and have to PAY FOR THESE SERVICES a lump sum, my question is same as robbloks plus : How much, or even better, is there ANYTHING left for their profit ?????

If you mean a threshing machine - to separate the rice from the stalks etc then the rice harvester does this in one operation. It goes into the paddy and leaves sacks of rice behind. Think combine harvester used in harvesting wheat.

There are still threshing machines used but they are comparatively very labour intensive compared to the rice harvester.

The BIL currently charges 600 baht/rai for harvesting.

Edited June 8, 2014 by Mudcrab

[Estrada]

One thing i dont understand is why small farmers do not work together to buy the expensive machinery , a group can borrow the money more easily and they all can use the machines ,

They did like that in holland like 100 years ago and it worked great

Also with the high price as they propose better have 24/7 look out on the border for rice smugglers

You don't need any machinery to grow rice. Here is planting, about 2 hours work to plant the field.

2014-02-14 15.42.45.jpg

No need to borrow money for equipment you can't maintain

They use machinery to prepare the fields. Used to be buffalos which also self fertilised the ground, nowadays they use the hand guided tractor which drips oil instead. Planting is then done by hand. They use machinery to dry the rice and process it before selling to the merchant as it is very hard work to do it by hand. They usually have the equipment in the villages and pay per day for the use.

[thumper101]

Mom and Pop shops rely on about 10 to 15% margins. The sit there all day long up till 11pm in some cases, they work normally 7 days a week and 365 days a year..... Nobody is helping them..... why should they??

Rice farmers work a few months a year and demand 40% margins handed to them by the taxpayer, they never need to buy rice to eat as they grow it.

They voted themselves into this situation in the first place out of nothing but greed. They have had no thought for the rest of the country and how they would be suffering under the Thaksin regime, they thought of themselves and hunger for money and now they have woken up to their foolish actions.

I'm sorry, but eventually you have to take the infant off the tit and put them on solids for their own good. When a child goes onto solids, it is a very messy affair as all parents will confirm, but in the long term, that child will learn to feed themselves.

If the farmers can't make a living from growing rice, then learn a new trade or work your business more efficiently. There are other crops out there that don't grow at a loss.... They have to learn to diversify. Thailand can't take much more rice production, it has too much rice as it is and there is going to be big problems for the farmers to sell rice. The government MUST stop buying it.

If all MY business margins disappeared tomorrow, my wife can't get it shored up to provide her a living, they will tell her to go **** herself.

Thaksin has created a monster. The rice industry is doomed for a few years... get out of the industry...

[zyphodb]

The a Elephant in the room that everyone is ignoring is the corruption and the idiocy of the pledging scheme. At the very outset many of us forsaw the paddy rental prices going up, fertilizers and seed prices rising and the fact that the middlemen, millers and warehouse owners taking all the benefit along with the huge rice farmers. The small farmer was doomed from the outset. Also the fact that people will fall over themselves to grab more profit yet need to be forced to take a loss. It is the nature of greed.

The proposals seem to ignore these issues as well as the supply and demand of the market. That said the farmers do need help and stability which cannot be achieved long term with schemes that are short sighted, ignore the huge pressure from corruption and ignore the world market prices.

In order to produce stability you need to have a controlled supply and some control on costs of production. Government controls on these factors have never worked very well even in the more accomplished industrial economies. So really market forces need to be able to act.

The best way to help the farmers would be to control production costs better by providing a low cost supply of land for paddy at a controlled price to drive private rental prices back down to where they were before the stupid pleading scheme was introduced. Fertiliser and other material costs should decrease as less rice will be grown if the inflated pledging price disappears, set up a team to control middlemen profits and keep check on millers pricing to cut down corruption.

Additionally set aside a healthy sum from the budget to provide much much better education in the rural schools, looking outwards with language and business courses to supplement the mainstream subjects and give the younger generation the basis for greater opportunity of career choice. Provide free workshops and government funded learning centers to educate on alternative crops that can be grown with some sort of incentive programs to enable farmers to switch to an alternative if meeting certain criteria.

This is the direction they should be traveling rather than the continued ideas of subsidy and controlling market price which is beyond them

Sent from my iPad using ThaiVisa app

Did you all see that Pig fly by folks?...

[kerrysum]

One thing i dont understand is why small farmers do not work together to buy the expensive machinery , a group can borrow the money more easily and they all can use the machines ,

They did like that in holland like 100 years ago and it worked great

Also with the high price as they propose better have 24/7 look out on the border for rice smugglers

I agree...but unfortunately, these people cannot work together like that....no-one is trustworthy ....the kids even sell off their parents farms.....I don't see how they could work with communal machinery.

Cooperatives are common in many countries.....possibly with education and efficient training programs, it could eventually be viable.

Farmers need to diversify....

Now this what I call true logic, because it is this way, from my many years of dealing with Thais.... Guess it is just in their blood sometimes..... But I guess that is what holds them back..... And about the parents farms? You are so correct , that part really pisses me off! I sure miss the old Thailand.

Just my two cents..... kilosierrra

[bassman]

The farming industry in Thailand needs to be totally reassessed, not just the price of rice. Diversification of crops is as much or more important for the long term economic development of sustainable farming. More rice from cheaper fertilizer and subsidized prices will only continue to drive world prices down and increase gluts, as such is the problem today in Thailand. The populist rice programs of recent years have ruined the rice market for the near future.

In much of Thailand the only crop that is viable to grow in the rain season is rice due to the extreme climate of the annual monsoon. But to build and improve the irrigation systems to further increase rice yields in the dry season is self defeating while trying to make the free market price for rice profitable for the farmers. Diversification of crops grown in the rice paddy in the dry season is the way forward. However, growing other crops are easier said than done, from the outrageous custom charges on imported farm machinery, the small paddies, the lack of local markets to sell products other than rice and on and on. The 500 billion baht loss on the rice pledging scheme sure could have been spent on better programs to assist the Thai farmers during the 21st century.

[BlueSkyCowboy]

One thing i dont understand is why small farmers do not work together to buy the expensive machinery , a group can borrow the money more easily and they all can use the machines ,

They did like that in holland like 100 years ago and it worked great

Also with the high price as they propose better have 24/7 look out on the border for rice smugglers

The banks know better. This people can not work together and be responsible for a machine. Same as Mexico. Holland is a different world

[Thai at Heart]

Allow foreigners to set up their own factories and buy direct

Cut out the middlemen.