#  >  > Living And Legal Affairs In Thailand >  >  > Farming & Gardening In Thailand >  >  Sugar Cane anyone?

## sadloser

Sugar cane: just been asked by the family to fund the planting of 9 rai. I'm delaying the  :Sorry1: but they seem determined with the :kma: or at least the brother in law does.

I want to know the expected return per rai  :smiley laughing:  and the cost of planting [no labour ].

If you have any knowledge or experience I'd be glad to hear it. :ourrules: 

Currently - clueless but cautionary.

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## MeMock

Go for it! world sugar prices are off the chart at the moment.

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## good2bhappy

ah hem
not sure on this one
price is fixed by the govt
a lot of talk about sugar but if you dont plant at the right time you might not see your crop for over a year
I am sticking with Casava

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## blackgang

With bio fuels and ethanol it seems like sugar would be as good as any.

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## nevets

I was up in Nakhon Sarwan and Uthai Thani , sugar cane everywhere.

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## BugginOut

You might better ask your brother-in-law how much you will make, then have him sign a contract promising this amount of return. Also take some kind of collateral from him. If he doesn't like it, then he either is insincere or inexperienced.

Isn't everybody tired of the farang who got burned story yet? Take measures to protect yourselves and we can finally be rid of the sob stories.

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## sabang

Times are definitely good for sugar, but what I can't speculate on is the honesty and competence of your business partners.

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## Ciaphas

If the BIL is that keen why doesn't he just get the money from the ethanol factory they will pay him an advance to plant the crop with a guaranteed price on sale. If you don't have the equipment e.g tractor, truck etc. I would strongly recommend against it as you will be left with very little or no profit with only 9 rai. Last time I had any dealing with sugar you could expect around 10k per rai but it sounds like it might have gone up a bit since then.

I've heard many small holding farmers this year talking about sugar because the price is good this year, which means next year the market with be over saturated and the market will bottom out. It's happened with cassava and then with corn last year. One thing you learn about Thai farmers is that they are always chasing the highest profit crop which inevitably leads to a losses.

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## corned dog

Our second year with only 2 rai First year profit 9000b  after ploughing land and buying the sugar etc Second year (2 weeks ago ) 17000b profit after costs lorry chopping sugar down an bottles of lao khao for 2 days

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## good2bhappy

^ great news

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## Mid

indications are that the sugar boom is over .

also

_Isn't everybody tired of the farang who got burned story yet? Take  measures to protect yourselves and we can finally be rid of the sob  stories._

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## sadloser

Steady on boys ..... I don't want this thread closed on the grounds that it's off topic. I originally asked straight forwardly: ' I want to know the expected return per rai and the cost of planting.'

Having had to sift carefully through what has been posted I've learned that there is a profitable return. Also, 2 rai has returned an increased profit for corned dog from 9 k to 17 k over two years.

Discussions here have moved on and there are 13 rai to plant with 5 rai already being done. That leaves me with an investment of 20 k to make to finish the remaining 8 rai, plus fertilising it [which I understand it will be some nitrogen regeneration of the soil in order to feed the new crop] and the purchase of sugar cane to re-plant. The latter being of good quality.

With minimum figures of return standing at 5k per rai I'd double my money if I took the total sale price. However, should the crop return Corndog's latest figures of 8k per rai then my investment would double. That would enable 'my partners' to be in profit. Ciaphas reckons on 10 k per rai, which if correct would give 60k on top of the invested sum. But the economic views expressed are wrong. Prices are ring fenced and negotiated on behalf of the farmers with the sugar producers. The fact is no bottoming out, or price collapse will ocurr as it's a political hot potatoe and 'subsidies' are in place.

I don't want to offend anyone as some of you have already done in your responses. However, some of what has been posted is out of order and should be retracted. Who needs insults, or obscenities; I want info on growing sugar cane. That's all.

Those of you who cast aspertions regarding the character of family members, it starts with Bugginout, are off topic. As for being 'inexperienced' the Thais know farming. They may be unwilling to modernise but what they do they do well enough. That includes growing sugar cane. Re-questing some kind of sequestration of his assets shows your own inexperience. These are dirt poor farmers. What do you suggest I take? His catapult? The guy recently came out of the monkhood; he has no possessions. Rich of spirit but lacking in material trappings. Never assume.

Sabang, to answer your own question: then don't. It's off topic.

Blackgang - I wonder at your choice of avatar and epithet as your comments are racist. You'd be seen by the Police in the UK and cautioned as a minimum step. And that would be as a result of any one complaining and supplying evidence. Evidence which you supply. You are openly racist and not at all funny. Furthermore, you later sink to obscene insult before reminding us all what this thread is about. Sugar cane. And that is pure hypocracy on your part. Shame on you. But remember, on this subject you can't put up so you're left with one option. Take it. :ban him: 

Those of you who follow his lead should know better but add nothing of value. That's you, by the way, G2Bhappy, just in case you don't get it.

Scottish Gary, exactly right and well said that man. And Dr. Andy, well said, we could do with more of that medicine.

I'd like to conclude by thanking those with thoughtful and insightful comments. I'm better informed and intend seeking answers by way of questioning others in the moo bahn as to costs, labour and machinery.

Hopefully, more later.  :UK:

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## jizzybloke

> I don't want this thread closed on the grounds that it's off topic


 :rofl:

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## tsicar

> As for being 'inexperienced' the Thais know farming.


i truly wish you well with your venture.
...but without malice, i feel i have to burst your bubble:

the part of your post i just quoted shows your total ignorance of the expertise of the rural thai farmer.
added to that, your total lack of understanding of how rural thai farming families fund their farming "businesses", (and i sincerely hope i am wrong in the case of YOUR family members), has me believing that you are in for a hiding.

if you REALLY feel the need to invest in sugarcane (and i am not saying that there might not be a profit to be made), then lease the land from your relatives, research the subject thoroughly, avoid hiring ANY family members as labour or advisors and shop around for labour and fertiliser prices YOURSELF.

....and if you are not living in thailand as all this bullshit is unfolding, and do not have TOTAL control over the operation, then i suggest that you made a very wise choice of username.

good luck, sad loser.

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## Ciaphas

> But the economic views expressed are wrong. Prices are ring fenced and negotiated on behalf of the farmers with the sugar producers. The fact is no bottoming out, or price collapse will ocurr as it's a political hot potatoe and 'subsidies' are in place.


The same was said about cassava when that became the crop of the year and look what happened to that. Good luck with the venture, enjoy the experience.

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## blackgang

> I don't want this thread closed on the grounds that it's off topic. I


Why shouldn't it be, you have made reference to what everyone said, which covers a lot of topics,
I say to close it or to MKP with it.

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## sadloser

Again, my final thoughts are to thank the more helpful of posters. Independently, I've got to the bottom of equipment hire costs as against labour costs. Hire fees for transportation and loading and how to separate them out.

Overall, I feel enlightned by those of you who actually talk the talk rather than invent yourselves via the keyboard with each post, to be in a position to give it a go. Hence my thanks to you. With that I'd like to conclude the post other than for any of you to add further inf. should you feel it pertinent. 

Sincere thanks.

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## tsicar

> Again, my final thoughts are to thank the more helpful of posters. Independently, I've got to the bottom of equipment hire costs as against labour costs. Hire fees for transportation and loading and how to separate them out.
> 
> Overall, I feel enlightned by those of you who actually talk the talk rather than invent yourselves via the keyboard with each post, to be in a position to give it a go. Hence my thanks to you. With that I'd like to conclude the post other than for any of you to add further inf. should you feel it pertinent. 
> 
> Sincere thanks.


you are welcome.
be sure to come back with a report on how it all worked out.
best regards
(sorry if this reply is a bit off topic, mods)

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## gusG

> As for being 'inexperienced' the Thais know farming.





> These are dirt poor farmers.


And why are they dirt poor, if they are so experienced?

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## superman

QUOTE="gusG"]And why are they dirt poor, if they are so experienced?[/quote]


Because the Chinese merchants control them. No poor farmers in Isaan, no rich Chinese in Bangkok.

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## DaffyDuck

> Again, my final thoughts are to thank the more helpful of posters. Independently, I've got to the bottom of equipment hire costs as against labour costs. Hire fees for transportation and loading and how to separate them out.
> 
> Overall, I feel enlightned by those of you who actually talk the talk rather than invent yourselves via the keyboard with each post, to be in a position to give it a go. Hence my thanks to you. With that I'd like to conclude the post other than for any of you to add further inf. should you feel it pertinent. 
> 
> Sincere thanks.


Undoubtedly this is bound to be a very entertaining thread in the next 5-6 months, if not sooner.

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## genghis61

just an excuse to use this pic of the crop last month (south Sa Kaeo province). Farm has approx 200rai on crops - cassava, rice, sugar, and something else I've forgotten the name of, plus some 20 rai blocks of eucalyptus. 
Can't comment on profits - they'd never tell me! everything gets poured back into farm maintenance, new tractor equipment for contracting out, and leasing more surrounding land, must be doing something right.

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## good2bhappy

600K worth of tractor-nice

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## SEA Traveler

Cut down some sugar cane today from the house yard, took off the leaves, cut the cane into 50cm piecs & bundled it up. Approx 100 kilo. Then we went Chang (Elephant) hunting in the village to do "tambon" (make an offering). We decided to wait near the restaurant in the village so ate dinner and just as we finished we saw the elephant with his mahout (trainer) so made the offering. Always good ...to have a little merit under the belt (doesn't hurt to have the cane out of the back yard either).

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## Nawty

> Undoubtedly this is bound to be a very entertaining thread in the next 5-6 months, if not sooner.


Daffney's gunna drop his pants for us all to get a giggle..

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## DaffyDuck

> Cut down some sugar cane today from the house yard, took off the leaves, cut the cane into 50cm piecs & bundled it up. Approx 100 kilo. Then we went Chang (Elephant) hunting in the village to do "tambon" (make an offering). We decided to wait near the restaurant in the village so ate dinner and just as we finished we saw the elephant with his mahout (trainer) so made the offering. Always good ...to have a little merit under the belt (doesn't hurt to have the cane out of the back yard either).


 Have you ever considered getting a press, and squeezing the cane for the juice?

It's insanely good drink!

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## MakingALife

::chitown::  I realize the thread is old, but I wanted to post something for Sad loser related to sugarcane.   I have distant cousin with almost 2 decades in the cane farming business.  He has small partnership with laborers and one cane truck and harvests for local farmers as well.

His advice was taken with good general results, as the crop harvesting was completed yesterday.  The 6.5 Rai planting has produced 68 metric tons of sugarcane.   The crop was planted in mid May and had 8 months growth time before harvest.  The cane was about 9 feet tall and had pretty fat stalks.   It was harvested now to sync next years crop to the winter season harvest with a full years growth.    

A good cane cycle typically involves one planting, followed by 3 harvest cycles.   Planting expenses are recovered over the yield cycles.   At the end of harvest 3 the crop must be changed, or significant soil enhancements will be required.    If the soil is exceptional then a 4th yield could be attempted off the same planting,  however in my location this wouldn't be successful.  

The land should have some slope, for natural drainage in the wet season.   The rainy season can kill a crop if the land traps too much water. 

Yields will vary greatly depending of soil fertility, and reasonable rain or supplemental watering available.   In my small town - a good yield is considered 16 Mt / Rai.   13  to 15 Km down the road that towns soils yield between 20 to 24 Mt / Rai with good crop management.    My cousin knows local yields well from his harvesting business that covers farmers in this area.

For a good crop -  on weaker soils - soil supplementation is paramount.  Successful cane farmers will use a liquid processed cane waste - spread by tank truck.   An other alternative is a dry granulated cane plant crushing waste - dumped by 10 wheel truck and spread by hand or tractor blade.   These items are applied and worked into the soil before the planting phase.    The better product is the granulated crushing waste,  because it helps loosen up the mostly clay soils found here.   It is less likely to be washed away from spring wet season rains, and its nutrient value is time released as the plant cellular matter slowly breaks down.

Both of this items are typically given away free by the mills,  but delivery pricing is based on truck charges for the long wait time involved for loading.    Truck waits are often between 12 to  24 hours in get loaded.   Most trucks trucks could earn 3000 to 4000 daily profit in hauling services - so they have to recover as much to sit and wait for loading of this waste.   

This material is applied after every third year yield, prior to replanting.   The price for trucking is not cheap - even with the product free.       

Commercial machine planting is as recommended because the planting achieved is very uniform and properly spaced for a good crop yield.  

As a comparison of what not to do....  I have other  relatives who planted a crop around the same time as our crop.   They planted by hand to salve money, and did not add anything to their soil.  Their initial crop growth was slow,  consequently they lost part of their crop during an irregular rain period - because the plants were not hearty enough to survive the dry period.  They had to replant a portion of their lot, as a result.  Their current crop size is too small for harvest acceptance.  Plant diameter is too small and of low weight.  They will  have to wait for  a late April harvest.   Currently, with the dry season here,  they  are forced to bring in water - to keep their crop alive.    

Unfortunate situation for them.   They are going to replant again after their first harvest -  Treating the land first with the granulated cane waste before the new planting.    They own a dump truck, and could get the cane waste at no costs, other than their lost opportunity cost, from the wait time involved in loading their truck.     

Typically the three year cycle - first year profits are low, with crop revenues going to offset the initial crop cycle expenses. 

My planting costs were 650 per rai (for the machine & crew). Original planting cane 2800 per rai (for delivered stock). Pretreatment with granulated cane waste amounted to about 2000 per rai.     Havesting,loading, and transport costs were  350 per Mt of sugar cane.   Labor and equipment cost for (1)  weeding cycle and (1) fertilizing cycle ran about 200 per rai .   Total commercial fertilizer cost (used with planting machine and 1 fertilizer cycle) was 780 per rai.     

These fixed crop costs total about 4430 per Rai, or about 28800 B total.   Crop revenue - harvest cost generated about 44200 for the 6.5 Rai plot.  So this first years approximate profit is 15400  or about 2350 per Rai.   

I left off the initial land tilling costs - because I have a tractor with implements so fuel is the only operating cost.   Tilling costs were about 1200 B.    Paying for someone to do  commercial tilling in my area can be purchased for about 250 per Rai.  IF I paid for land tilling it would cost around 1700 for the same service.   Either way you slice it -  The land prep cost work out to between 200 to 300 per Rai.  When this is accounted into the cost / profit.  The first year profits were about 2000 per Rai.      

In follow on years - costs for other crops will be significantly less.   The crop will also have a yield advantage from a full 11 month growth cycle , instead of this years 8 month growth before harvest.  That 11 month growth cycle will  - which will raise the harvest about 20 percent above this years value.

Crop season Two will much lower costs involved.

There will be (1) power tilling cycle to shred up the trimmed cane leaves left on the site after harvest.  One tack tack furrow cycle will be involved to turn this shredded matter into the soil, as the new plants emerge.   There will be one fertilizing cycle prior to the beginning of the rainy season and perhaps two weeding cycles in the rainy season.  At that point the corp will be tall enough to self shade and inhibit weed growth.

The power tiling cycle will run about 2000 B.  The fertilizing cycle will cost about 2500 B.  Two weeding cycles will cost about 1000 B each.  All done with local resources.   So crop costs in the 2nd year will be about 6500 B.    Revenues - harvest costs for season 2 will be about  53000.  Second crop profits will be around 46500 B or about 7100 per Rai.  

The third years crop costs would be about the same,  with the same work requirements involved, and with profits in the same range.  This assumes cane prices remain at current levels.     

Combining the all elements into a three year cycle.   Total crop  cost would run (28800 +1200 +6500+6500) or 43200 B.   While net revenues (yield - harvest costs) would be around (44200+ 53000+53000) or 150,000  B.    This gives a rough profit of (150,000 - 43200) or about 107,000 B over the complete cycle, or about 16,400 B / Rai for the complete 3 year cycle.    Or an average yearly return of 5500 per Rai.   Or about 35,700 B / year, for this small 6.5 Rai plot.  

That is a reasonable average return for a crop that is fairly low maintenance to tend, and hearty against most local threats.   

These observations, reflect a years experience, and employing the best pre- treatment and cultivation practices developed used by the more experienced local area farmers.   They reflect my costs, as a farang who has a good general relationship to most local Thai's.    

It illustrates the cost intensive nature of a sugar cane crop - start up.   Many locals cant afford to fund a good start of a cane crop - unless it is serially linked right after good earnings from the rice season.   Most can do multiple tapioca crops for much less outlay.  

The methodology involved here -  Reflects the best harvest practice currently employed  (no crop burning pre-harvest).  Unburned cane earns a premium price at the mill we sell to.  The practice of power tilling in of the removed cane leaves - left after each harvest - is a practice encouraged by the government as a low impact alternative to burning the crop before harvesting.   This method will add significant nutrients and organic matter back into the soil.  Something that  is important for Issan areas with marginal soils.           

In time this attention paid to enriching the soil by these methods will lift yields to approach the higher levels available in nearby towns that have richer soils.   I have a small pig operation with a small lagoon catches wash down water from the pig  house.   This is still a start up operation (since August), but the lagoon is pumped out to this small cane plot also helping the soil

It is well to recognize - cutting corners and skimping on land pretreatments,  where weak soils are present,  will give much poorer crop results than I have described.  This is why under-capitalized farmers  find it difficult to get higher earnings from their land.  The cycle reinforces itself.   Often time poor money management is a factor in cutting the wrong corners.  

It is pretty clear from my good friends friends (a couple) who cut every corner they could, planting at their cane crop at the same time as I did.  They put themselves on track for a low yield.  Now they are unable to synchronize their current  crop harvest to the traditional harvest season.  As such they now have the additional expenses to manage water needs of their crop through the dry season.   Without question they see the different crop results from my plot.  (I had no choice about pre-treating my land, because the land was very poor).   They had the opportunity to do the same thing with their land that I followed (at a very low cost to them, but didnt do it)  Now they want to follow this practice, and will treating the land and replanting after Aprils harvest.    This effectively forces them to absorb more planting costs.   So they will be restarting their cane crop cycle over at year one in April.    

Next year at this time they will be harvesting a 9 month crop harvest with new planting costs involved, While I am having my first of two higher profit harvest cycles. 

Their errors have proven to be significant financial set back for their cane farming profits.   The husband of this couple was happy to haul in cane waste for my land (at a reasonable fee) with his truck,  but didn't want to spend his time to do so for his own land.  His soil was weaker than he realized, and getting a good sugar cane crop from it was a big stretch  The year was a learning experience for him.      

I have been very fortunate to have a cousin who is a very experienced Sugar cane guru.   He was able to speak intelligently about what it takes for a good crop result.  He had stories and details of every process he has tried to improve cane yields over the years, and what worked vs what did not.  He inspected my crop almost every week, and pointed out the best time for the weeding etc needed.  He had a network of local friends, who did the intermediate items (weeding & fertilizing) to care for the crop, at a reasonable cost.  So I brought those folks in for the little demands the crop required over the season.  

Almost every method used with this years crop, were the same techniques he employs with his own crops.  

This cousin was quick to recognize that the land plot that I was going to try this crop on - had never been suitable for local share croppers to grow much of anything on let alone sugarcane,  because of the depleted un nourished soil.   

He didnt have a specific recommendation for the land pre treatment that I should use, other than cowshit.  The suggestion of using the granuladed cane waste, came from another farmer friend of mine.   It is a practice he uses on all his crop land.  He prefers the use of dry ground cane waste as land pre treatment.   He owns (2) - 10 wheel dump trucks and lives only 7 Km from the sugar mill.  So He uses a lot of cane waste on his cane fields after every third year.  His sugar cane cycle yeilds have steadily improved and he now has very high cane yields, from following this practice over and over.     

This years first successful crop - is directly a result of the good advice and open dialogue shared with other Thai's who are experienced cane farmers.    

It was surprising to see the reaction of most folks in my town - to see the cane crop that grew on this land plot.  The land had been considered mostly  worthless.  Enough that the former land owner never farmed any of the parcel.   He spend spend more than a decade unable to sell the plot.  He was only able to lease about 1/5 of the entire plot consistently.   Yields on the portiion now used for sugar cane have always been poor.    Regardless of what was planted on it.   

The land seller was up front about it, saying the land would need  substantial care to become good  productive land.   While I am retired engineer, and not a farmer -  I spent 6 years in the rural New Englande States, and had many school friend with dairy farms.  It was easy for me to see how bad the soils here are by comparison.   So the challenge of what is required here to do better with farming is no mystery.

The economics of farming sugar cane - work,  but only if one can achieve a reasonable yield.  The economics pale in comparison to rice production, particularly if one can do several rice crops per year.  Sugarcane as a crop is very demanding of the soil.  

A large portion of plant nutritional requirements remain in the plant waste after the crush is taken from the plant at the mill.  This probably still is not well understood by most farmers.  The mill gives this waste product away (in hopes their regional farms will use it).  And they have no market for this excellent organic soil booster.   If the sugar mill loading delays could be taken out of the equation,  this "free" nutrient resource would be cheaply available to those who farmers who could dramatically boost their soil with it.  

Unfortunately trucks must line up and wait for excessive times to get this free resource.  This requirement jacks up delivery pricing, and for the cost to most locals for a 10 ton truck worth, would instead buy them (5) large bags of the top premium commercial fertilizer.   Premium fertilizers have more mass appear to most farmers,  they work fast and give good crop growth, even if the commercial product washes away in the run off after a month of rain, It takes less labor to apply, and gives impressive results.   
The natural cane waste product decays slowly and feeds the crop through out the season.  The waste feeds the soil bio activity over a span of years.   It will not wash away at any where near the rate of commercial fertilizers.    

Blending this waste product and use minimal use of a small portion of premium fertilizer,  gives fast and sustained crop growth all season long.    It is part of the science behind why they work best paired up.  It explains how historically bad soil, can be turned around to produce a good yield from what is otherwise a very demanding crop.             

For "Sad Loser" and other folks engaged in, or considering some sugar cane crop production - sharing knowledge and experience shortens the learning curve and improves the probability of success.    

The decision to change over rice production to sugar cane production is much more complex than the economics involved, or the labor demands of one crop over the other.    

In the unusual rains of the spring of 2009 - I saw land drainage issues kill tapioca crops and sugar cane crops.  Standing water that any rice crop would have managed and thrived in,  will kill those other crops that need root drainage to thrive.      

From my simple observations about the way most rural rice paddies and rural rice farming have developed here,  Most of the land would not cross over well for sugarcane.  The drainage during the wet season from such low land simply isn't there.   

Any land reasonable suited for a rain fed rice crop, probably isnt suited for sugarcane.  To convert them to sugarcane would require adding drainage and slope.  That is something that could be created at a price of about 100,000 per Rai for the land civilworks needed.   

Any crop area suited for Tapioca (which prefers good drainage) would likely be suited for sugarcane - if enough soil fertility existed.   

There is no short cut, and no free lunch - when it come to trying to develop the best return from rural farm land.   

There is no question land adjacent to nutrient rich historical river basins have built in soil fertility advantages.  Land as well with a ood water source or nearby irrigation canals offer distinct farming advantages.   

Land parcels with those qualities have sustained families across many generations, and lifted most out of the bottom teir of poverty.   Such land is seldom turned over outside the family,  or available in the market place.   

Most other parcels obtainable on the market, or sold through opportunity -  Take some study and intelligent land work to make up for natural short comings.   The good thing is that most weakness in land condition can be overcome, with understanding and careful steps executed over time.     

In the rural areas most folks engaged in farming rely upon the good will and assistance of others if they encounter an unexpected issue that has to be solved.   

In the same fashion, most extended families will step up and pitch in, pooling their equipment to help others in their family with their farm work.   Everyone in the farming business have more of an adversary in the weather than any marginal family practices to worry about.   

While it is easy to see marginal conduct taking place in the spectrum of general affairs,  it seldom takes place in the area where people have to band together to push their farming pursuits ahead.    Farming is fragile enough a profession to strain family connections around.    It is very common for bad weather patterns to put an entire crop at risk, within a 3 to 5 year span.    

It is important for people to recognize this when the look closely at family motivations - It is not the same thing as borrowing money of a store, or any other venture.

Best of luck with your sugarcane

Pat

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## somtamslap

^ Good post..I didn't read it..but good post.

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## genghis61

Really interesting; what part of the country are you in?

Farms here (sth Sa Kaeo) have just one rice crop a year unless land has a good river, and the sugar crops - they get just two not three as you mentioned. This 180 rai farm a mix of cassava, sugar and eucalyptus, places with a bit more elevation near here have rubber and palm oil, interesting riding through the changing landscapes/crops.

Very vague figures, but I was told that they double the investment in year one, four times in year two then start all over again.

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## MakingALife

> Really interesting; what part of the country are you in?
> 
> Farms here (sth Sa Kaeo) have just one rice crop a year unless land has a good river, and the sugar crops - they get just two not three as you mentioned. This 180 rai farm a mix of cassava, sugar and eucalyptus, places with a bit more elevation near here have rubber and palm oil, interesting riding through the changing landscapes/crops.
> 
> Very vague figures, but I was told that they double the investment in year one, four times in year two then start all over again.


Genghis,

I am located between Phi Mai and Huai Thalaeng.  About 75 Km out of Korat - basically east.    I live in a small rural village with about 256 families, and have been there since late 2008, which makes me a new Expat from North America.     Building a house home here is 2009, with a daughter born in August 2009.   I have traveled all over the world with my work,  but retiring here remains without question one of the best experiences in my life.    

My wifes family have roots in this area,  and she was able to purchase land after a long time looking.   The plot was listed as 50 Rai on old documents, but most measurements reveal it to be 42.     30 Rai we do terraced rice,  6.5 is happily working good with sugarcane,  the balance is cow grass.    We have  cattle given by her family that now have double in size to  8, and a small pig operation that is a new start up from July, that is doing fine.   The goal here is work smart to produce good crop yield's and reinvest surplus to improve productivity.   The land has two man made ponds - a very large one for water resources, and a smaller one for the cattle to use.      

It always proves interesting.  Asking questions of friends and family about their farm practices and listening works best.  Most folks with experience are willing to share observations.    Some ideas work well,  some do not,  but its never from any bad intentions passed.    

Like anyplace there are a few rotten apple's, but they are easy to pick out and they get little traction within the community.    Folks here are for the most part genuine and open.   I treat people fairly and get the same in return.  

I have met Farangs in Korat,  who have rice plots in Phi Mai area.  They benefit from the excellent irrigation system that extends water out into the rural farm land. One guy explained to me they have a main Homily crop and a shorter season 2nd rice crop.   They have also tried 3 short season rice crops in place of the two rice crop model.  Cropping rice 3 times was modeled to  mimic what some of the large commercial farms above Bangkok practice. 

He said its a question of timing to be able to pull off 3 rice crops.  And it depends weather and price factors as to which option proves most profitable.   He said trying for 3 rice crops carries higher risk than being settling for 2 rice crops.   He said often that trial results in only getting 2 good shorter term crops, and the last crop will not reach peak yield before its time to harvest and start over.   

Around here - most farmers will produce 1 rice crop.  Only those with larger plots (above subsistence size) that have good water access will try 2 rice crops.   

We are doing a limited 2nd crop in two fields to gauge water requirements at this time.   Perhaps next year to expand that to 4 fields.  IF this years trial works well.    

For the current year We will be planting yellow bean in the (4) fallow rice fields to act as a green nitrogen binding crop.  This will be tilled in about a month before the normal rice season starts.  This is done to build soil fertility.   

In the end - progress comes slowly and takes a willingness to take some risk.   People are more closed lipped about some risk taking with their crops.  They fear loss of face.    I am glad I don't tap dance to those kinds of fears.    

In this area - a lot of people are taking out their Eucalyptus  because growth is slow, and progress isn't  matching expectations.  Most see those tree stands that have not thrived as being lost land opportunity   for other crop productivity.   Many have converted their tree plots to  Tapioca.  

Those with middle yields in the wood business -  have rolled profits into into sugar cane on those plots.    I have seen more Eucalyptus cut in September / October that any time in the previous 3 years.   Others have tree stands that are thriving, and are standing pat with their trees.         

Indeed it is interesting to travel the back roads and see what people are doing crop wise.   When you speak about a 180 Rai plot -  That allows good crop diversification across different plot areas, based on the plots best use and available resources.     There seems to be a cult of rubber producers near Buri Ram who have found good production and return from that crop.

There is little question that the current cropping and other ventures in place would be reasonable sustaining for me,  if my retirement surpluses were needed for other expenses.    I believe with three years  of careful enhancements,  effective yields can be doubled off the current land holding.   What it will take to achieve that is probably probably not complex, or out of reach by method or cost.     

I do not pour a lot of time into farm pursuits every single day, but I have learned to observe carefully and think critically about those observations.  

The land work done on this property has forced me to solve issues that were unplanned and a challenge to master, mostly related to drainage and water management.   

That period is behind me now and the focus is on carefully improving land fertility.    I am fortunate to have a niece who speaks English and holds a masters degree from a Major Ag University in Chang Mai.   So she and I have calls several times per year to assist me with strategy and options based on observations.   I am very lucky to have her as a willing resource.   But her information ends up often in technical garcon that takes me a while to decode.  

Sorry to ramble on,  I agree completely with your assessment of points to doubling of productivity output every year for for multiple years.   That indeed is a is a growth defining process in keeping with a geometric growth model  Nature follows this kind of progression and is capture even more accurately by the Fibonacci number sequence.      

Best of luck with your journeys through the countryside making observations about the changing practices that risk takers in agriculture follow.  

Pat

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## MakingALife

A snapshot of a commercial planter, putting the crop in, May 15, 2010


A rainy snapshot taken at 2 1/2 months of growth.  Note the plot has good drainage, even with a heavy rain squall.

Sugarcane in mid October 2010, about 5 months growth.   January 2011 the cane was harvested at 8 months.

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## somtamslap

This lot have been in the ground for a good eight months..

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## donald36

Sadloser is rather naive --he asks how much return per rai to expect --one of his  problems will be that  his costings dont include all the theft and deception that will go on during the growing and harvesting of the crop 

We had a foolproof partnership to grow Cassava with wifes Brother result no money for us ---good news was it stopped us doing a lot more business with him --his problem and most of the rest of them is they cannot resist gouging the farang at the very first opportunity--now they work for us on a day rate and if they dont like it there are lots of others

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## hillbilly

While donald36 has some valid points, please remember it all boils down to the luck of the draw. All families are not the same...

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## MakingALife

Trying again to post the full size image [at] 2.5 months of sugarcane growth

Sugar cane at mid October at about 5 months growth

Thanks for the patience shown for my stupidity in my earlier picture posting.

Pat

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## MakingALife

> While donald36 has some valid points, please remember it all boils down to the luck of the draw. All families are not the same...


I agree very much with Hillbilly's remark.   Not all families behave the same.  

I have extremely good fortune with my wife's close and her extended family.   They mean well and have done their best to help us with needs here.

Business relationships are an entirely different matter. 
It takes caution and diligence, and careful follow up to not be taken advantage of.    While many Farangs with bad experience think its a Thai vs foreigner practice.  

I can assure most foreign readers that the same situations take place between Thais.  My wife has long standing friends who have businesses in Bangkok and all have been victim to scams and fraudulent practices by their own employees.  Usually it is with senior managers who have taken years to get into a position of high trust.  It seems to happen to them every 5 years or so.    Their stories and experience would curl peoples hair    

I have Thai acquaintances who have been screwed badly by partners on projects, or hosed over from personal relationship matters.

The lesson learned is that Caution and Dilligence, and careful follow through apply on every business relationship.  

I dont think people are inherently more dishonest here,  but the enforcement mechanisms to redress such action are significantly weaker here.   

So the climate here fits the legal code, despite the strong ethical Buddhist teachings that are common to native culture here.   It is the way things are.  

Predatory self serving family interests are on this landscape here.   But it clearly is not that way for all families.  I have extended Thai family members - who have some career or financial success, and receive the same kind of treatment from their inlaws.   

For those with unethical extended families -  I feel sorry for the conflicts this will cause in their lives and spill over into their principal Thai relationships.  

I know at least 4 foreigners who hold a lot of contempt and hostility towards their extended families.  Even the foreigners who first put a good hand out to that extended family got poor treatment in return.  Where one finds and picks their spouse - is probably as good a precursor to the kind of extended family they may likely inherit.    

I have been fortunate to have been well accepted within my Thai family.  Initial give and take played a part for that acceptance.   I do my best to follow Thai traditions and behave according to the cultural demands.

My wife also carefully vets any requests for help by her extended family.  While they are rare, the happen.  It is easy for her to recognize a real need from a simple  want.  If they need money - everything is spelled out and above board.   I don't profit off small loans and have discouraged my wife from asking for interest.  

Putting everything above board makes in impossible to lose the moral high ground of providing qualified assistance.   It minimizes misunderstandings and that alone is important to everyone.   If it is help or expertise (with a strong engineering background) I give of my time and expertise, when it is needed.    

If its only money =  I have a small block of funds set aside for those needs.  When that money out on loan - there is a limit to the total available.   When the limit is reached.  Folks are  turned done, until the original funds are repaid.   

This is also well explained and above board.  People listen if they are turned down and have no complaints.  The cannot say I dont support my extended family -   because the evidence is made clear -  that the family is supported based upon need to a reasonable limit.  

A reasonable limit for me - is considered generous by Thai standards.   So its a real win-win.  We have loaned money - to post bail,  to pay legal fees,  to pay local schooling,  to fund crop starts,  to help with down payments for scooters,  etc.   The funds return and the cycle repeats as needed.   

In the end the extended family honor their debts.  It all works well, and keeps my wife and I in a place of honor for the entire extended family.    But mostly it is our good conduct that keeps us in or place of honor with the family.   

Her family have seen from a distance, how I have handled contract related matters in Thailand, or business items that have developed issues.  The also know about history and the hard ball work environment my old career was based upon.   They recognize that I have the ability to recover results and pursue things with high diligence.   

This established persona also registers on the extended family understanding.   My wife has done equally well to cast that mythology into the mindset of her clan.  

I have a very good relationship with the extended family.  They know I am fair, considerate, and respectable.  It would be a loss of face within her family to try a scam or make a game of a situation.  .  Those things would would never fly, and would stand out exposed on the radar screen.   

We have one sister in law who had a poor and confrontation reputation in the family.  She was effectively dealt with when she attempted the same with us.  She is now "persona non grata" with us.  Please don't think its all perfect, but knowing how to handle the bad apples is equally as important as knowing how to deal with all the good extended family members here in Thailand.  

Sorry this is so off topic to sugarcane.   But the discussion seems to fit the dialogue raised by the original thread poster.  

Thanks for reading my two cents worth related to sugar cane.  I hope it has helped people form a better opinion.

Pat

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## donald36

Very much agree with Making a life Thais screw each other with   equal enthusiasm, we are not really picked on ,its just that they think we have more money 
I like her brothers they are very hard working, when they are working, but can blow up over minor things and off they go  ,frankly their wives are more of a problem certainly one and probably two women have married my wifes brothers thinking that they, and their extended families,will have full access to the farrangs money,a constant hassle for my wife turning down the endless requests ,her view is she takes care of elderly mamma and pappa and the rest (barring maybe serious illness )must take care of themselves, exactly as my wife had to do before she met me ,generally these hangers on are one of the biggest threats to any Thai/Farrang relationships

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## MakingALife

> Very much agree with Making a life Thais screw each other with   equal enthusiasm, we are not really picked on ,its just that they think we have more money I like her brothers they are very hard working, when they are working, but can blow up over minor things and off they go  ,frankly their wives are more of a problem certainly one and probably two women have married my wifes brothers thinking that they, and their extended families,will have full access to the farrangs money,a constant hassle for my wife turning down the endless requests ,her view is she takes care of elderly mamma and pappa and the rest (barring maybe serious illness )must take care of themselves, exactly as my wife had to do before she met me ,generally these hangers on are one of the biggest threats to any Thai/Farrang relationships


I had to smile when I read your posting,  because I easily see and relate well to all your observations.  Indeed there is no question that farang wives do get into a difficult role - to set the posture in place, to help family from time to time, but in balance to needs and within reasonable limits.   Yes it revolves around a common believe that Farangs have unlimited resources = which clearly isn't true !!!!

There isn't a chance for anyone to marry my wife's siblings. All her siblings are taken.   But given the typical misunderstanding surrounding Farang wealth - It would not surprise me in the least to hear about someone marrying into a family for that reason.  

We take care of my wife's older parents, who have worked hard for most all of their lives.   Her family were coffee farmers who  lived on Phuket.  My father in law was also trained at a very young age in Muay Thai, and was a professional fighter with more than 15 years ring time.  He taught that art for another 15 years after retiring.   So as an individual he has had a rich life experience and has a very kind nature with very quiet  spiritual dimension.  Spirituality is a part of the Muay Thai boxing tradition that isn't well recognized by westerners,  but it is an integral part of that sport, and its behind many of the things on can see before bouts start.     

I agree other wives within the extended family that  bring the most volatility into the mix.  Not always,  but I would bet the largest conflict is more connected with women than with men.       The men can be hard headed, but are seldom confrontational or instigating as the woman can be.

It would take too long to give details of shit that happened as a direct result of this confrontational  "sister in law",  but it ranges everything from:  attempted seduction,  instigating property disputes, open stealing of property,  giving away booze from our parties, inciting her family a month ago to attempt  arson during our Christmas party on our crop land.    The sister in law is not welcome any longer in our home for any reason.    An investigations in that attempted arson is ongoing and 1 informant has given a statement, one more informant and mayor will have police arrest and prosecute the person involved.   He said it takes (2).  He said it is a very serious matter.      

The sister in law sleeps around often on my wife's brother who works out of the country on contract.  This sister in law threatens her children not to tell their father about her exploits.   Her 5 year daughter never spoke a single word to adults,  for the first year we lived here.    The little girl would speak in hushed tones to my cousins little girls, but refused to answer any adults Thai or otherwise for any comments.    She had a blank expression when any adult talked to her only looking with her eyes.  I have never seen a young child capable of such controlled and cautious behaviour.   

We used to take  this 5 year old girl with us about ever two weeks to Korat to the mall, to eat out, shop, get a toy once in a while,  and use the pool.     Zero conversation in probably 20 outings is pretty chilling.  She has only started talking to adults going into her 2nd year of kindergarten.

My wife tells me this girl was  too young to leave home so the sister in law dragged her around for most of her extra maritial encounters.  I dont really want to know the details of  that,  but its pretty repoachful behavoir for a woman who places the itch between her legs - rule ahead of the exposure her daughter may have been subjected to.     A mother like that in most parts of the world would lose her children and face criminal charges for failing to protect a minor against such exposure.

My wife doesn't know about the sister in law's  attempted seduction. when I first came to Thailand.  I had enough ethics in tact and the judgment to decline. And was smart enough to keep it to myself.   I know now that if my wife were aware of her sister in law's attempted seduction,  she would mop the street with her.  She would most likely get a free pass from the town because this woman's behavior is not appreciated because its cuts across too many cultural lines for rural Issan, and it is too self serving  and careless for otherst for local Thais to accept.        

I am willing to bet that is probably some one like her exists somewhere in every Thai extended family - somewhere.       When those folks are uncovered - steer clear.

Unfortunately for me this one lives in  two blocks from my house.  In the end I give her a wide birth, and don't worry, as my wife's family will handle matters that arise.

The good thing about Thailand is that a little Bhat goes a long way.   Had the woman been successful in burning my wifes sugar cane and her animals in their buildings, . without any justice served -  I will gladly spend a little Bhat to put a fix in to balance the scales of justice with no DNA under my finger nails either.... 

That said  -   I have had great luck with the justice system here.   Not a single disappointment in several outings where hands have been forced and people refused to redress their damage.   Slow but fair.  I can accept that.  

Returning to the sugar cane topic.... 

My harvesting group brought all the mill receipts last evening to my home.   They get one per for each trip to the mill.   It is computer printed and includes the date, time on the scales in and out, Vehicle license plate number,    Gross delivered weight and empty weight after off loading.  And weight of the delivered sugar cane.  These receipts also list the amount of fuel in liters given at the mill to the hauler. The receipts are very complete.  It is easy to cross check the empty truck weight and see it is fairly consistent, with less than a 10 Kg variation across 9 or 10 deliveries.   That difference is due to the amount of fuel on board the truck.  

All deliveries are processed against the same invoice number - which is assigned to our sugar cane sale.    So every truckload is delivered against a delivery number.  Funds will be wired to the bank account of the harvesting company.  Funds are released twice monthly, so its always 15 days or less to wait for funds.   There appears to be no tax or VAT charged on the wholesale supply of raw sugarcane.

It is very easy to track the money from those material delivery receipts, If you know the price the mill is paying.  It is set and posted as well. 


It is also to see all the the slips are  above board and calculated to the nearest Kg.  My guess is that most mills use similar systems to account for deliveries.   It is pretty hard to be cheated or shorted. 

A harvester would have to have an inside deal with that mill agrees to use that circumvents the automated posting system to short change the crop owner.  

Doing so would cut the fee earned by the harvesting company (since they are paid by the ton as well).  So most harvester would not want to get on board for that since they lose fees.   Harvestors also value their farmer customers.   So they want to cut a farmers cane every year if they can.   

The harvesters dont have that kind of clout with the mills either to work out such a scam.   Mills want loyal customers returning to sell cane to them,  because the mills  need cane to make their full economy of scale in their seasonal operation.   

The çrop owners are not stupid either - Its no coincidence that my harvester (who also raises his own cane) was able to guess my total harvest within 5 tons.  Just by knowing the area under plant and looking at what needed to be cut to fill his truck.   

So good experienced crop owners,  will know if something is wrong if their crop harvest comes in unexpectedly low.  

Harvestors would pick up on it as well.  If the mill was attempting to scam them and the farmers as a group.  Havesters know what a full load weights on their vehicles from doing it over and over year after year.    

There is too much good intelligence on the part of both - to be scammed by the mill as well, by mainipulation of their automated receipt process.  

If the mill wants to creat a scam -  they just  push to set the price lower and screw everyone equally.  That would be very short sighted,  when earnings go down for the farmer - acreage under planting drops.  Or at harvest time, farmers ship their product to other mills that do better.    

It is well to remember that the mills benefit with they have the highest throughput. So returning loyal farmer /customers drive their profits up,  They get a better economy of scale for their operation.   So it is unlikely that mills want to break the law and bite the hand that feeds them.  

Their profits from processing and refining are higher than the producer.  They take the most out of the deal from anyone, except perhaps for the exporter or marketer.   

Hopefully this explanation will take some fears about getting swindled by a deception from the crop harvester or mill purchaser out of the minds of potential cane growers.  The process is s transparent enough to  follow the numbers and follow the money.    

The material deliver receipts are printed from an automated system, not hand written.  Thus the human element appears removed from the deliver accounting process.   

Good luck with your sugar cane growing experiences.  No one should fear getting swindled in this process its too transparent and trackable.   

Pat

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## JHON53

Hello Pat,
My name is Jhon and I live in Belgium.I'm married with a Thai wive already for ten years.Here home place is Nung Bua Lamphu.Since we are married we(with farang sponsoring off course)have been buyin some land and so a few years ago we had about 80 rai.I than also believed in the sugar cane because off Ethanol and so.
Now we already(my wife and family because I'm tired off the problems)are doing this for five years.This year will be the fourt harvest and still-if I can believe my wife-there is still no money comming in.Now she bought a tractor on credit behind my back and she is still paying for this one.
Bud it is like she never knows how much money comes in and go's out.That is why I found your explenation verry helpfull.
She has tree brothers and on son(who does not like to work too much) and all the family is living from this business...........Now I understand all the things you are writing bud if you say that after tree years you make about 5500 BHT I don't understand why my wife can not make any money!!
The only reason I can think off is that it has to do with the family.I ask myself how many months do you need to handlabour(planting,fertiliser,weeding,harvesting) because when I hear my wife the brothers are ALWAYS working and off course getting payed.Now it is so that my wife has a verry good hart for the family and that is why I also wanted to help.When she is here she is working verry hard because she still has a daughter who is going to high shool bud I have the strong impression that there are other things.Because as far as I know here tractor is after five years not yeat payed off.So you can understand that this is giving stress here in Belgium also because every day she's hanging on the phone and every week there are troubles.
Bud that on the side;I would like to get your impression of what could be the problem.Now I also know that the prices of vertiliser,gasoline and trucks is going up bud I have the impression that she is using too many people(she wants to help whole the village)and  that the brothers are just doing what they want because the mother off my wife is also a little easy with her/our money.

Another problem I see already for a year or two is that the rainy season is taking more long and that the water stays on the field too long.I don't know how it is feeling where you live?Because up to now(februari 15)they are still cutting.My wife is there and she told me the mill stopped a few times-witch happend before also-bud I don't think that is the reason.I think that the water stayed on the fields too long so the cane will not give the best price?

So,Pat,I'm realy interessted in what you think.
Hope you have time to answer.

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## MakingALife

> Hello Pat,
> My name is Jhon and I live in Belgium.I'm married with a Thai wive already for ten years.Here home place is Nung Bua Lamphu.Since we are married we(with farang sponsoring off course)have been buyin some land and so a few years ago we had about 80 rai.I than also believed in the sugar cane because off Ethanol and so.
> Now we already(my wife and family because I'm tired off the problems)are doing this for five years.This year will be the fourt harvest and still-if I can believe my wife-there is still no money comming in.Now she bought a tractor on credit behind my back and she is still paying for this one.
> Bud it is like she never knows how much money comes in and go's out.That is why I found your explenation verry helpfull.
> She has tree brothers and on son(who does not like to work too much) and all the family is living from this business...........Now I understand all the things you are writing bud if you say that after tree years you make about 5500 BHT I don't understand why my wife can not make any money!!
> The only reason I can think off is that it has to do with the family.I ask myself how many months do you need to handlabour(planting,fertiliser,weeding,harvesting) because when I hear my wife the brothers are ALWAYS working and off course getting payed.Now it is so that my wife has a verry good hart for the family and that is why I also wanted to help.When she is here she is working verry hard because she still has a daughter who is going to high shool bud I have the strong impression that there are other things.Because as far as I know here tractor is after five years not yeat payed off.So you can understand that this is giving stress here in Belgium also because every day she's hanging on the phone and every week there are troubles.
> Bud that on the side;I would like to get your impression of what could be the problem.Now I also know that the prices of vertiliser,gasoline and trucks is going up bud I have the impression that she is using too many people(she wants to help whole the village)and  that the brothers are just doing what they want because the mother off my wife is also a little easy with her/our money.
> 
> Another problem I see already for a year or two is that the rainy season is taking more long and that the water stays on the field too long.I don't know how it is feeling where you live?Because up to now(februari 15)they are still cutting.My wife is there and she told me the mill stopped a few times-witch happend before also-bud I don't think that is the reason.I think that the water stayed on the fields too long so the cane will not give the best price?
> ...


Jhon,

It is always a challenge - to do a project, raise a crop well, or do any kind of business related things.   Working with one's extended Thai family is part of the challenge partly because of language / communications.   Partly because many of the local folks here -  Do not really think every thing through logically and plan with a high level of pro-active intention.....   

Jhon - I am a retired engineer, from a technically challenging environment, and I had a leadership role for several decades.   I try to see all the details of things - like a chess game, and work on contingencies that evolve always - with events.  And try to build and stick to a game plan related to pursuits.  My goal here in Thailand, besides living a good life, is to build something sustainable and evolving over time... So it works well and takes only a little work, for a reasonable reward.    Agriculture is sustainable - That's why I work to develop this.  It is also at the mercy of the weather, which adds a measure of unpredictability.  One has to remain flexible, and shift gears, due to those impacts.   

It truly is hard to get all the details related to things, up front, or in time all the time.   I find in general - people here (even Thai to thai) don't ask each other for many details or considerations, or a lot of questions.  They really go with the flow, and make decisions as they need to.   It works for them.  But it really is not the way to get as close to the best decision every time.   

The 5500 B / Rai, as three year average earnings per Rai.  Jhon -  That is my best projection - baring anything unusual.   I am very fortunate to have a cousin who has grown sugar cane for almost two decades.  We talked in general about off and on for a year - before I decided to try it.   He has given me guidance.   

6.5 Rai - Its not a big area of Sugar cane planting,  but its not a bad return for the investment.
We outsource the labor for all of it.   For everything - except the initial land turning over process,  since we have a tractor. 

It is very hard to get my wife to keep track of expenses related to anything.  Her brother and I are engaged in a venture - and It was very hard for me to get him used to the idea of keeping basic records.  Over time and with a lot of reinforcement -  He is doing it now.  But it still takes the help of others, with feedback from their part of the process - for him to get his portion correct.    I have checks and balances in place with others who collect different data from the operation, and assembling it all -  Its easy to see when mistakes happen.   As unbelievable as it sounds - Often her brother will review my compiled data - and remember he forgot to collect money for some services that he sees in my record.  So he does his best, and gets help from others, and looks at my accounting as well.

I have been working to get him to recognize what factors contribute most to profits, and what issues not correctly managed  - leave losses or money on the table.   It is a long learning process.    

The concept of Profit is secondary to Thais,  because most of their lives - their first concern - is having a job.   Keeping working in any venture -is probably more important to them - than the harder task of focusing on efficiency or profit.     It is a cultural value issue.

As I said,  my anticipated profits of 5500 B / Rai is based on a 3 year average expected cycle.   Thai probably dont really connect the crop to a three year or four year cycle.   They see the first year (with its larger costs)  as being an issue - if they can afford to do a crop or not.  Since the returns in the first year for my area is only 2200 B/ Ra   The second year,  yeilds will be around 7000 B/ Rai...   They probably see those kind of returns come in and feel very rich and proud of their work...   Wanting to get a tractor and those kid of things...  with the windfall.   Buying on credit is a national passtime here.   It is a big part of the culture.    Manufacturors build in incentives to do this as well.     As an example -  My wife wanted a tractor,  because the large big name tractor company offered 2 years - ZERO finance charge - If you bought one under that program.  It was an awesome deal -  So  agreed it would be a smart buy.  Which it has proven to be.

Year three - would be another windfall year for most Thais doing sugar cane.   Some may think or try to squeeze more out of it,  but if the soil is weak - the deminishin returns - dont justfity it.   Either replanting or crop rotation is the logical choice for people who actively want to increase their yeild.    If the folks have squandered their cash reserves,  replanting costs will not be in the kitty for them,  so they have to push another year out of their crop.

A lot of Thais struggle with money management.  Not all,  but I would say at least 50 percent do.   Sure eveyone struggles with money..   But if you depend on farming as your significant income source - bad money management is a pretty big flaw to overcome.

Lots of folks mortgage their land, to the land bank - for cash to plant crops or other purchases.   Most of those deals have a multi year repayment plan. People will do this with big plans to upgrade their crops etc -but come up short on funds to see it all trough -  Then it becomes a white knuckle finish to get their debts paid - just to keep their land.   I see it and hear about it in my town all the time..

Why you dont have any profits even after 5 years ...  It could be for a variety of reasons.   Sugar cane reveues are very easy to track.   Mills give out slips to the crop owners,  typically handled by the transportation company.   The slips have date, gross truck weight, empty truck weight - and give a number for the metric tons delivered on that date.   Get your delivery chits  and multiply by the price offered and you have your cash flow.   Subtract the transport and cutting costs - and you have your net cash flow.  
Take out the costs for other expenses and you have your profits.  

Why no money ??  It gets spent - on cost of living related expenses.   Something that few Thais are good at keeping track of.   If they have extra money, they use it.  If they are short - they economize.   IF they dont feel like economizing -  they take on debt.   If your crop efforts - sustain the family and leave them with operating capital to cover farm expenses year in and year out -  Jhon -  You should count your blessings.   

If you have taken on some debts - for the purpose of doing better in the farm business.   That is typical of any farmer, anywhere in the world.    

The concern I would have is if you family is pilling up debts, and living well beyond means,  without disclosing it.  It is easy for that to happen..... Too many buy on credit elections,  then a total mortgaging of your land assets - to take out operating cash.  One hicccup in an arrangement like that, and a shocking bail out will be required..  Or worse yet -  Assets end up downsized - land is lost,  and  because of face saving - people will not admit their secret.   

With the backing of a foreigner who invests a little cash - Most Thais should be able to intelligently thrive in the farm business.   I see many good farmers here who work it all carefully and move ahead.  Most years.

But that group is in a minority,  and are in their good postion because they have sacrified to get land holdings and take care of that land with almost a religious fury.....   That separates the successful ones from those who struggle.

I hope I have given you some insight, and some things to think about.    With 80 Rai - you will for sure be able to sustain a family very well, and should have some profits that are carefully reinvested year in and year out to improve that farm business

Best of luck to you

PAT

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## MakingALife

Jhon..

I wanted to mention a discussion I had with my father in law's younger brother.   He drove a couple hours to come and see us, to talk about a 10 Wheel dump truck to haul sugarcane.   He was looking to purchase one - because he was unhappy about the hauling price he had pay for his sugar cane transport.   

He has outstanding soil in his area, and has a 20 MT / Rai cane yeild.    With 100 Rai under plant his crop   He had about 2000 Tons ready for harvest.  With this years price, its about a 2 M bhat crop.    He was alarmed to see his transport costs at 240 B/ M ton, set by the mill.   The sugar mill contracts with trucks for that service, and they deduct the cost from the farmer.   

The guy's farm is 100 Km from the mill.  We averaged 5 or 6 mill slips together and came up with a carriage of 25 MT / truck trip.    A trip costs him 240 B x 25 MT,  or about 6250 Bhat per trip.   With 80 trips needed for hauling 2000 tons.    We modeled his transport costs at 6,250 x 80, or around 500,000 B.  That is about 25% of his crop revenue.  

About half of the mill set transport cost was connected to diesel fuel.  This was based upon looking at the truck fuel taken notes, that are on the transport slips.

So It was easy to point out that If he had a good used truck,  he could  cut his transport costs by about 50%. Saving him about 250,000 B in transport costs the current years crop.  He said he is in the sugar cane business long term.   

So even with good used 10 Wheel dump truck pricing around 1 M.   He would recover the savings over 4 crop years.   

We worked the numbers -  If he were to take that truck and haul - outside of his harvest season,  such as going in the dirt hauling trade.    Typically with a good group on a good projects - A 10 Wheel after basic costs for fuel, simple maintenance etc -  common profit is around 3500 B / day for the truck owner.    With the dirt season about equal to  180 days duration, minus the 80 days he would need for his harvest time.   He would have about 100 days to earn revenue from his truck.   That would generate about 350,000 B for his dirt work.   

I showed him how this modeling would generate the 350,000 profit, on top of improving his crop earning (by reducing transport costs) about 250,000 per year.  So the positive from a truck investment, would be in the range of 500,000 to 600,000 in positive cash flow per year.      It gives a pay back for a 1 M truck purchase of about 2 years.   

Beyond that first 2 year period of time.   Staying in the sugarcane business and running dirt -  He would end up 500,000 to 600,000 ahead of the game per year.   Running the good used truck for a period of 4 years,  and he will be able to build up the full purchase price of a brand new 10 Wheel dump  (that sell around 2 to 2.2 M).   

Following this track, would allow him to part out the used truck and save the cash, while rolling over to a new 10 wheel truck that will add reliability to his overall operation.

I recommended that he shop for something in the 1 to 1.2 M price range -  That buys a good truck in the 8 to 10 year old range.     He said he would never think of paying that kind of money... He wanted a 700 or 800 K bhat truck.   Unfortunately that price buys a 20 year old truck that is pretty well worn out.   

A 20 year old tired 10 wheel dump, is not something I would want to be on the road with, with the vehicles load maxed out.   

But he said he didnt want to pay any more than that price range - regardless of what the truck looked like.

While it was a good exercise to help him size up the numbers,  and where it became pretty logical for him to take over his own transport - with a 2000 Mt / year crop....   He seemed to be happy with all the things the simple math was pointing towards

It was not really possible for him to gauge the difference between an 800 Kb worn out truck, vs a 1.1 or 1.2 M good used 8 to 10 year old vehicle. 

Nor was it possible for him to really grasp that running the used vehicle over 4 to 5 seasons and he would accrue moneys to replace the vehicle, and sell the other truck that would be in the range of  14 to 15 years old and bank that cash.   The new replacement vehicle affordable from cash would be a top brand truck with the highest quality name dump back.    

Or even the really good bonus idea - of getting a tandem trailer with his mid tier good used truck.   It would give him even better economy of scale for his own sugar cane harvest.  With a  tandem trailer - His earnings in the balance of the sugar cane season would top his dirt season earnings.   He would still recover the costs in two years, and could sell off he pair in 4 years to upgrade to new running gear.

In the end, roughing out the economics of choice, cost recovery, net savings, and positive cash flows from different truck investment options -  Most of it went over his head, as soon as he struggled to get comfortable with buying a mid tier used 10 wheel.  He wanted the cheapest 10 wheel truck.   

Sadly the guy had cash, and good cash flow from the crops ready to harvest.    He could have freewheeled any possible choice for 10 wheel to haul his cane.   But he was stuck on cheap price, regardless of vehicle age.  

Jhon -  It is an example of the poor decision making - for some locals struggle to execute upon - even a guy with financial capability for many options, no real debts to worry about, and with guidance as well. -  

He was stuck on price.   People stuck on price point -  get the deal of a lifetime they are hoping for, but struggle trying to run sugar cane with the vehicle heavy loaded to safety issues, and where they experience un needed truck breakdowns.  

It happens to the best of them -  because everyone has some friend who had gotten a good truck deal at a cheap price, and blossomed financially from that experience.   In the hauling business in Thailand, locals don't get how hazardous the roads and drivers are here.  Its not a place to be running heavy loads with worn down equipment - it does away with the safety margin.   

I see heavy older Sugar cane trucks turned over on their side, almost weekly in the season, on one specific corner going to a sugar mill that is about 20 Km from here....    The corner has a sharp bank incline on an uphill corner.  Old heavy loaded trucks run real slow up and into that corner.    Their suspensions are tired and worn, and typically bottom out on the inside wheels.  This load shift combined with the high center of gravity of the load,  flips the truck on its side.   It puts the truck into the oncoming lane, on a sharp semi blind corner.   It is a recipe for disaster, and it is the norm almost weekly during this season,  and usually happens in late evening or a night run.      

Most folks stare and wonder.  They light bond fires in the oncoming lane before the corner to alert traffic of a tipped truck.   I've never seen a new truck tip there,  Its always the 15 to 20 year old tired vehicles.   You can tell the age from the original year in the older license name plates.   

The mystique of an old cheapest 10 wheel dump to run sugar cane - its a folly and an accident ready to happen.   For those with no option -  OK they roll the dice.  For those with means to enter that business wih a good ROI,  the hunt for an old cheap 10 wheel is just stubborn will.   Its a classic example of bad decision making.

Most cant work the numbers.  And even when they do or get help....  They still come back to a bad price point.   

I could tell you about similar mis Q's  that seem to plague ag industry,  but dont want to churn it here.   The guy I know wanting to sell his 10 wheel dump for 1.1 M... Is doing that because he wants to get in the rice harvest machine business...  Another epic folly because of all the unstated complexity of that business.    People look at the numbers - sported by dealers who sell these machines.   Dealers cast a rosey thumbnail of a profitable business - but leave some key details out of their cost analysis out of the picture.   The machines go out the door,  and the people who buy and operate them eventually struggle with the issues that were not well defined in the vendor analysis.   I've seen the pitch, the glossy one page projection, and it looks irrestible on paper, but its a high maintenance machine that requires a good sensitive operator and team to be effective in the field.      

Its these kind of details, missed at first, or left out intentionally that skin locals alive, and burn sponsor families asked to purchase a great business asset for the family.   

These things sit at the root of why it is hard for you to find profits from your sugar cane operation.

Again - best of luck with your cane business.  The family have to be handled with care and patience to get closer to the heart of fiscal matters.   All fear fingers pointed, and all do not like to be scrutinize.  It is a loss of face.    But sorry - business is about profit, not face.  Bad or uninformed decisions kill the farm profits and farm ROI's.   Its part of the struggle to get thinking and decisions to revolve around an informed strategy...   Its a part of the reason profits appear illusive.  

Do not be discouraged,  Its always possible to improve the process and expand the thinking,  but it takes as much patience as possibly Budda could muster on a good day.   But good things are possible and part of managing Thailand - is making the good things happen, and letting go of the idiotic - which can be found just about anywhere.   And which seem to connect to money and extended families.

Take care

Pat

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## JHON53

Hello Pat,

thanks for the fast and clear answer you posted.I have been reading it a few times and I think that you and I are thinking the same.I think there is a big management problem.And when we started this I was already scared for that since we had to arrange many things from Belgium you understand it was not easy.Bud as I see your calculations(give or take a little)this was also the amount we had in our mind.Around 3500/5000 BHT a rai.
I also knew about the 3 year cycles for the crop and so.For the rest I trusted my wife because she knew all about the sugar cane.I did said to her that there was a difference between *working and managing* a business.
First off all,I helped sponsoring this thing because first off all I do believe for Thailand that sugar cane is a good product as they use it for Ethanol and many other things.Bud I  did it most because I knew my wife is a very family orientated woman.She has been taking care of here brothers since she was twelve,now they are all married have children.I think you understand the situation.So I did this to give work to here family and son so they could stay at Nungbua and work there.
The land I bought it at a very good price in small pieces  so that was not the problem.

Now I think the first mistake I made was sponsoring to easy and too fast.I should have done it more slowly bud what's done is done..

The second mistake was that-since my and my wife are in Belgium most off the time-to leave mother in law in charge!!!
This I saw it cumming bud my wife thought her mother was smart enough to handle this even I knew she was not because we already had problems the time we put a house there(bud that's another story)

The 3e problem was that all 3 the brothers wanted to be the boss so my wife  has to phone every day over there to say who could drive the tractor and who would have to do the cutting and other stupid things.I don't have to tell you that every day there are small or big problems and when everyone wants to be in charge it doesn't work.Now I told her this has to stop NOW or that she has to sell everything and that they can go work in BKK,because these problems started to have effect on our live here in Belgium as you can imagine.And as I feel that up to now nobody wanted to listen this will be there last chance to listen or to loose their job.
Now we decided to take the oldest brother and his wife(she's already doing the paperwork and she's doing it good) as "manager" and the rest will have to listen,or else............
So we will see one more year.Because this year I could see that my wife was also tired of it.She is working here in Belgium for seven years now and ALL here money is gone over there.Here she does not has to pay a thing in the household and she makes about 50.000 BHT a month.I think you understand that I start to ask myself questions about our "business" and what is happening whit the money she is sending.Bud when asked,the last two years she is not giving me strait forward answers.

As for debts(as far I still know it!!)she still has to pay off the tractor for about 150.000 BHT.That *should* be the only debts left.Bud when we first planned it,this should have been payed already last year.My wife says she's only paying 2% interest bud since she is late with the planned payment I think it will be a lot more.Probably she's scared to tell me so I don't ask about it anymore,better the get a lie :Smile: )

Now,Pat,I think that we both agree that a big part of the problems are the lack of someone to manage the things there.

I do have some more general questions about possible other problems who could play a role in the future.
I also understand that farming-business is very difficult because you depend from so many things and I did say to my wife before we started this that normally she should save the money that came for a bad year bud I think that as you say,Thai people don't think as far as that.

So,now a few more questions(hope you don't get bored from me?).Since you live there I think you can give me more intelligent and neutral answer than my wife or family.

What you think about the changing weather conditions the last two years?I don't know if it is like that where you live bud in Nungbua,as long as I went there,there was always short of water and the last two years there is too much rain.Because in the case from our land this is giving problems as I mentioned(cane stay too long in the water,harvest too late,etc)
Because that also is something that my wife does not(want?)to understand.It's also happening here in Belgium.

And my last question is a very difficult one I think.Do you have the feeling that the price off sugar cane can stay high enough if -as I think-the next years the price from fuel and specially fertiliser will go very high?

As I told you already Pat,I don't care if I don't make a Bath from it bud after reading my mail I think you can understand that I start to get a little tired of it also?Because deep inside I don't want to sell that land.I'm also planning to go live there a few years from now and I'm also someone who needs something to stay busy a little.

So,if you still have some advice I would appreciate it very much and will read it with the greatest attention.

Kind Regards

Jhon

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## MakingALife

> Hello Pat,
> 
> ... So,now a few more questions(hope you don't get bored from me?).Since you live there I think you can give me more intelligent and neutral answer than my wife or family.
> 
> What you think about the changing weather conditions the last two years?I don't know if it is like that where you live bud in Nungbua,as long as I went there,there was always short of water and the last two years there is too much rain.Because in the case from our land this is giving problems as I mentioned(cane stay too long in the water,harvest too late,etc)
> Because that also is something that my wife does not(want?)to understand.It's also happening here in Belgium.
> 
> And my last question is a very difficult one I think.Do you have the feeling that the price off sugar cane can stay high enough if -as I think-the next years the price from fuel and specially fertiliser will go very high?
> 
> ...


Hey Jhon,

I will do my best to give some answers as I know them and offer the best advice I can think of...

First of all -  Regardless of the pathway forward in the immediate future,  I would strongly advise you not to sell the land.   Good land holdings are hard to find.  Your future plans include retirement in Thailand,  so at a point in the future, you and your wife will be local in Thailand, and will be able to manage things.  Even if the operation struggles for a while before that.  Most likely you and her will be able to manage it successful, and sustainable.   You have made an investment, you should stay the course.  

Provided of course that the stress levels related to this don't impact you principal relationship too badly.  It is important to recognize your wife's reactions, and not lose that important partnership you have with her, because of the present concerns involved now.

Second - Regarding sugar cane prices,  I expect that they will remain at present high values out into the future, or perhaps rise.  There is talk of larger Aussie crops being put in, and production changes in other locations,  but it is also well to recognized that demand also is rising,  in part because the crop must make the stretch to cover food needs and also as a fuel.    I think it is a safe bet that sugarcane prices will hold or increase.  There is talk of some deregulation in the local  market place here,  which if i happens will boost the refined price, which will increase the farm price slightly.  

Jhon it is also well to recognized as a basic commodity, its price as with most commodities,  will tend to be cyclical.   The thing to keep in mind is that sugarcane as a crop with two principal uses (food and fuel),  so this upswing on the fuel use side, is likely to keep sugarcane from behaving in cyclical price swings common to other more single used commodities.

Third - about Thailand weather...  Rainfall  

This chart is from Thailand Governments Weather site.  It shows Year on Year rain variance, as compared to a 29 year average annual rainfall.   The graph suggests a trend towards increased rainfall, with about a 5 % higher value than average.   The graph also shows a large cycle of about 24 years duration,  that would suggest that this year may well be a turning point where the average annual rainfall, will be going to turn downward and start to approach more towards the average values observed from 20 years ago.

This year Thailand experienced a lot of flooding.  Mainly because an inordinate amount of rain took place, near the end of the rainy season.   At that time of the year, most storage dams - are traditionally approaching full.  They manage the watersheds that way - to ensure sufficient water  on hand to meet the irrigation requirements.    Heavy unusual rainfall, late like that forced many dam's to release water (for safety reasons),  This action set significant flooding all across many parts of Thailand.     Sugar cane can developer pests or root rot - from to much water.  

Averages for rainfall are important, but they are only good for so much analysis.   The country is more impacted by how much falls, and when it takes place in the season.   Thailand has little choice in how they manage their watersheds.  It is customary that they finish the rainy season with most watersheds full.  This puts them at risk for land flooding, as what took place and was widespread in the country just recently.

It is a safe bet that rainfall next year will be about the same,  but not likely that the rain will come late in the season, and will not cause wide spread flooding next year.  So I think you should not worry about rain issues next year.

My guess is that Thailand will see rain levels dropping in 2012 and beyond,  lower rainfall values will trend down to the lowest value show on the curve.   

Regarding extended family management ...  I have seen within the Thai Chinese community (many are shop owners) - that many business will have a senior matriarch who ends up handling the business's money.   I have seen this trend over an over.   Not sure why it happens,  but it is common practice.   

Placing the senior son and wife - to manage the operation is a good move.    They should make the rules, divide the labor, and make key decisions, in consultation with your wife.    This perhaps will get more unified controls.  Because the favoritism, or trends towards an un even division of labor - can come from the mother in law - who would be inclined to have favorites among her children.    The brother will bring a less bias to his focus, and be more capable of keeping the family in line.    The mother or matriarch may tend to be over generous to all her children.

If possible,  you should reward your managers, with some kind of incentive - attached to profit levels.   This will keep the staff focused where their attention should be focused.  With new folks doing the paperwork,  It is important that their performance is closely observed.   Assign them an expected profit value,  which if they hit it or exceed it,  will put more money in their pocket.   

I would recommend that you ask for copies of your mill slips  to cross check for added accuracy in calculating your revenues.   I would also recommend that you get notarized copies of your land documents. Leave a B&W photostat set, and get your originals in you hands.   This will prevent anyone from pledging titles for loans, without you or your wife's knowledge.   

For your tractor -  a weekly record of the hour meter readings and purpose for the operation, could be provided by your manager.  Most folks who have tractors want to put them to work (on hire) to others for land work.   This offset the tractor purchase and generates small income.   Most sell tractor services so cheaply that they likely dot cover all the true costs involved.    Seeing hour meter readings -  will give you an idea, not only of your machines use,  but also of its hourly based maintenece required.  

Sugarcane alone - does not require a lot of large tractor work, over and over.    Prep for planting in year 1.    Otherwise the cultivation between rows - is done by a small walk behind unit -  They are cheap to run as far as fuel goes.    A 70 HP Kubota (a mid size tractor) will use about  6 to 7 liters per hour,  depending on services given.  

Your managers should be able to give you these basic numbers... mill slips,  tractor weekly hours,  and any receipts for other items (weed killers, pesticides, and fertilizers).

No question commercial fertilizers are expensive,  but most good cane farmers will use either sugar cane waste (as a solid) spread around, or liquid cane waste.   Most mills supply these items at low cost, and he only real cost if for tuck hauling of those materials to the farm.   

Put it in the oldest brothers & wife to map the costs involved, and the business metrics - for crop yeild, tractor hours, etc.   They should be able to report these items to you and your wife to review.    You wife may have to give them some simple forms made out in Thai that she wants them to fill in weekly.   They can fax it to your from any post office (or  e mail them) -  So there should be no excuse about not being able to get all the data for you.

Your wife has to tell her managers....  Not to call with complaints,  but simply handle it and do their jobs.   Call only when the issue involves:  Crop yield, equipment failure, or anything else significant to the operation.
Dumping crap on your wife - to be the power broker - between family members, and forcing her to regulate things -  Is a great disservice to her, and not a nice thing to do,  when It is the sacrifice on her part and your part to float the operation.   While it defers decisions to her -  It should not be the kind of decisions she is being forced to referee or broker.

The mother in law -  If she handles the funds, needs to have a bank account in joint name with your daughter.  The pass book should be regularly updated, and a copy should be forwarded to your wife at least every couple f weeks.    This will allow her to ask questions if a lot of transactions take place.    I would not allow the account to have a debit card.   All transactions should be done within the bank branch.     Debt cards become too easy to use, and could result in unexpected business losses.  

Pay the workers a salary,  but keep the account reserved for most major expenses.    Notes about the expenses should be included from your managers.  

Trying to get these things in place will make the operation much more transparent.    That and putting new managers in charge and tasking them with that responsibility first and foremost -  will go a long way towards taking the ass ache out of what you and your wife have to deal with.   

The managers have to as well be put on notice...  That they will get all the help that is possible,  but they are to be expected to keep you both informed of issues, and to assess and point to the best solution's to the problems they identify.    They should be put on notice - IF they cannot handle the job,  Other manages will be brought in.

Harsh as that sounds, it may be enough for them to raise the bar.    But I would not make idle threats,  because they are smart enough to push back,  throw down the gauntlet and try to call that bluff.   If they ask why this is happening, you wife can explain its because the sugarcane business is not earning what has been expected, and these steps asked for now is going to help correct the bad decisions that have eaten away the profits after a long 5 year being in the business.  

The family should respond better, and be willing to step up and do the few little things that your wife is asking them to comply with 

I have seen a lot of what I CALL - "Take it or leave it" about an aspect of business, or a deal.   Rather than discuss things intelligently, sort the details and push for a needed change - The folks tend to push back and say - well if you don't want to do the job for this price, or those terms -  Don't bother, forget it.    

Business success is normally keyed or tied to that ability to negotiate the best possible conditions.    Its not a take it or leave it situation.    Many locals  find it easier to communicate in that way,  rather than being forced to debate and push for better deas.  To avoid conflict, or to avoid the work of pushing o get  a better deal in play.   "Take it or Leave it" Its a poor option handed back to folks who fund the operation and make it all possible.  

When the real answer should - Yea ok, we will get a better price for X or Y, and see what we can do to reduce costs Z.  

You get the idea.   Your new managers have to do their jobs, and keep you wife totally in te loop - but at a level that will force bad blood and power plays.   

When it comes to money... IF I told you some of thd BS and problems that come around with money or assets -  you would be alarmed.   These are things that I have seen in the lives of people connected to me in Thailand....   What happens between them and their families related to money....  or assets and a families wealth.   Money distorts relationships in Thailand.  For the highest caliber of family and friends money doesn't distort the relationships. 

But the temptation is always there for money or assets to distort relationships.   On has to be vigilant for those kind of things.   While it is sometimes hard to see if you are being played....   Getting metrics from the business,  make it easy to see if short term gains are forcing your wife's family to distort the relationships in favor of private dealings that benefit them first and foremost.

 I think you have already taken good steps, and are probably going to have a good handle on the crop and profits,  as this season winds down. 

Remember to keep your wife's relationship to you,  as the highest priority.   IF tensions flare, drop discussions and pick them up later.  Its easy to do that, and it shows your wife that you don't want upset about any issues that arise.

Best of luck....  Hope my advice is easy to understand, and something you and your wife can talk about and consider rolling into place.

Pat

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## JHON53

Hello Pat,

nice to hear from you again with some good advice.I had a long phone call with my wife yesterday(I think I told you she is there for the moment bud I had to stay here for work)and all the demands will be met by the family;let's wait and see.
Bud I think they are scared enough now they feel that my wife also means it.

-mother in law is out off everything;she does not really care because she more likes to hang around with the other    woman an gossip.Good for here.

-the oldest brother and his wife will take charge and will keep all the paperwork so my wife and I can check it.
-also one off the things she will change is the copious diners all the workers were getting.Two free meals a day+whiskey for the evening every day.I told her from the start that this was not such a good idea bud my wife did not wanted that,because she had this business,the people she knew before would say she was greedy.
That is why we had many people who wanted to work for us.They would come already around Songkran to ask an advance on their salary so the would be sure to have a job a the end of year.
As I said Pat,I don't think my wife was(I think now she understands)ready to take on this business at that time.

-the daughter(who is in high school)will do there every two weeks to double check.

-the other brothers and the son will work for the same price as the other people.Up to now my wife payed them 50 BHT/day more than the other people.Now we both know that 50 bht is not a big amount bud when you see it over the year it is.I always was against this arrangement and now my wife also sees that it was wrong to do so.Better help them a little when someone is sick or so if it is really necessary.

And then there still will bee some other small arrangements.Bud what you are writing to me I already tyred to explain to my wife for tree years now.I could feel that things were going wrong bud when I said something about it she would close up and say nothing or start telling me that I did no liked her family.I think now at last she is willing to see that for running something like that you need more that a good hart and hope that the rest will have the same.

And what you wrote about the "fist on the table";it was really high time believe me.If not it would not only would bring down the business bud also our marriage.I already have some Asian experience because I was married with a Philippina for 10 years so for me the Asian culture is not really new.
Because sometimes you have to be hard even if you don't want to.And I know it is much more easy for me than for my wife because she's in the middle.So as I said we will see how the new "manager" does his job.I don't expect miracles as long as they learns to take care of themselves a little and respect the work from my wife.

Now about the rain.It is very interesting to see your point of view.The only thing I'm a little worried is that it is not only happening in Thailand bud all over the world.Now I am not one off these green boys who cry end of the world bud I only can constate that the weather-patrons all over the world are changing.I even can see it here in Belgium.Since 2001 we never had real strong winters and the last two years the were very cold.
My friend just returned from a four month trip(India,Indonesia,Thailand)and he also told me that weather was not like two years before so the had to make adjustments to their planning to stay out off the rain.

Bud I also understand that there is not much we can do about that so we will just have to wait and see.

So,Pat,have a nice day(for me it is working day.............)

Take care

Jhon

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## MakingALife

Hello Jhon

Sounds like good things are  coming from your wife meeting with her family.  It will take time for her to work to get all things better aligned with the new managing couple.   But steps in the right directions.

As is bringing in a daughter to cross check Talley and the books on a couple of two week basis.  If she can handle looking logically at the numbers and metrics - her observations will be valuable.   

When we get farm labor here, or farm projects they typically fend for themselves for their lunch break.  The only exception is during rice planting or harvest. During that time, my wifes parents will make food for the crew.  It lets them get back to work sooner.   

If we do a project on the road (a separate kind of work) I deal differently with that crew.  They get, base wage, subsistence, and overtime pay.   But the work generates the profits for those extra perks.   I typically provided cooking gear and ice chest as well.   AGAIN It is different than Agricultural work.  

For the sugar cane - Its all out sourced on  fee basis for every service, on either a per Rai or Per Ton basis.   This makes it easy to project the costs connected to a crop.   Nothing is price by labor hours, when it comes to our sugar cane crops.

It is best to hope for the best and see how much traction you new managers get, and how well folks respect and heed your wifes instructions .   

My perceptions is that they will,  because you have provided a good work opportunity over the years,  People will respect that and respond to that history
Those who do not, and want to complain or stir up problems - They are not worth keeping.

I was managing some project work in my own career in the early 1980's.  I had one guy who was looking over a crew of 10 given direction tools etc.   I used to spot check twice per day.  On day 3 some disobedience and lack of work ethic was surfacing.    I discussed it with my boss -  He said line them up and fire the complete group. The next crew tat shows up will have a better work ethic.   He was right,  Behavior was right on  his que.   

You will make out fine,  IF the new managers cannot turn the corner,  you may be able to farm it via an agreement with the mill.  

Another option is to least the cane land to another cane farmer  for a fixed price, or percentage of the yield.   
But they have to responsible for  the lands production

There are many options to run it remotely, till you are onsight  to manage it directly.

Pat

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## DrAndy

ouch!  you two have too many problems to mention

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## MakingALife

> ouch!  you two have too many problems to mention


Dr. Andy

Its clear the difficulty Jhon faces trying to manage from a distance, 

Balance of the post has been removed, because it appears to be causing headaches

I agree Jhon sorting things out can be a head banger.

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## KOBRIEN

Make your excuses,Buy her brother a beer or 5 to shut him up and change the topic of conversation.Im getting a head ache on your behalf just thinking about the hassle you would have

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## JHON53

Hi Pat,

hope you're fine?I have the impression that some people get a headache very easy on this blog.

Lucky you're not one off them.I think that all the things you have said are right.I now have the impression that the family at last understands how things will work because it is like you say;if they don't understand it now the are not worth taking care off and the can go look for a job outside Isaan and leave there wive and children behind.

Now I don't expect that there never will be problems again bud anyway they can never say that they did not get a chance to a good life.And what you were writing about renting the land to someone else was also something I put on the table.
I already know an Aussie who already asked it in case I would be tired of it.So it is like you say,there are enough options without selling the land.

I will keep you informed and will look regularly if you have some news.It is always good to here from someone who is living there because there.


Take care Pat and enjoy the sun(in Belgium still rain and cold :Smile: )

Jhon

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## MakingALife

Hi Jhon,

Good to hear that things seem continue to shape up, with regards to the extended family and the cane farm operation.  As you have said - Plenty of options exist to hang on to the land, and rent out the operation if the family cannot run the farm and produce a return.

I am doing alright,  been keeping busy here.

Currently working to increase the sugar cane that is planted from the original 6.5 Rai to somewhere around 10.5 to 11 Rai.    Sugar cane waste is being dumped now every day and that should be finished early next week.   One day to disc plow and power till, and we will be ready for planting the new area.

Sadly my pond has been trying to serve triple duty,  which is watering  2nd Crop Rice in two large paddies, and for hosing down the pig house every other day. It was also being used to try to manually water the sugar cane.   The part time worker who was trying to do the cane watering, couldnt really manage to keep the gasoline pump filled and running, and moving the hose enough times.    As a result - Every time I looked at the sugar cane watering - water was running off the plot into a drainage ditch.    Time to move the hose !!!

My pond is now down 2.5 to 3 meters in depth from normal water,  3 more meters and it is empty..  

But after 7 days of spot checking and watching the cane watering going so badly.... I cut off the  manual watering.  A 4 inch line is too much for some folks to move -  So they don't move it.   They could shut off the pump, and the hose would be feather light, move it and restart the pump.   But its just not working out -  too much water has been wasted, and only 15% of the sugar cane has been watered.  Unacceptable

This is second growth cane (after the first cutting)  I needs a good push of water to get it growing good during this dry season.  I expected the plants to be doing better,  but they will not do so , without a good water push. 

So I am working on a new method.  I have whipped up a drip irrigation system, after spending 3 days of reading, half a day measuring, and time running the calculations.   Then about two days shopping for components  I now have 90 % of the components together.     

This evening I staked and strung lines for the main water pipes.    Some PVC will be delivered in the morning, and I hope to get the main lines and lateral  lines installed tomorrow.     I hope to have the system flushed and finished and ready for testing, as soon as the new cane planting is done.   I will have the system in for the existing cane completed before this.  

To address my water issues -  I worked with my mayor to get the town water line run to the property.   This is nothing fancy here, Its 2 inch PVC run in a trench by the side of the dirt road.   It was about 650 meters of line.    The town was out of money, and did no have the labor available to dig the trench.   

So I had my excavator operator dig the trench under the utility right of way.   It was  a twenty minute job for the machine to do.   I paid two water works guys (500 B cash each)  and they got all the line glued up, placed in the trench and connected as well.   My step son bladed the dirt back into the trench with the tractor.  So in two days we got municipal water on site.   Today we got 200 meters installed on a run down to the pig house.  Tomorrow the pig house line gets connected.

I am not going to into the irrigation system, except to say a DRIP type system is pretty water efficient.   But to cover 10  to 11 Rai - It still is a large water user.   Too large to connect the pump to the municipal water system.   It would suck the line empty, and leave every home owner complaining about low pressure.

So instead - I am fortunate to have a 27 m3 in ground tank on property.   This will be the source of water storage for the irrigation system.   That volume will give about 1 hr and 20 minutes of irrigation operation.    

It will take  about 20 hours to refill that tank with the municipal water,  drawing down 5 to 6 gallons per minute.  The municipal system will be able to handle that kind of water flow.   

The municipal system would not handle the 85 gallons per minute that the irrigation system is sized to deliver.   

I am going to make the irrigation system idiot proof,  so that it will start every evening and run its cycle.   I need to source Two mercury floats to control pump start (when the tank is full) and pump stop (when the tank is at minimum suction level).  

The pump starter control cabinet I purchased also as a timer function so the system can be programmed to start at a certain time.  Putting the float switches into the control logic after the timer, will make it all automatic.   So I can set it to run at  9 or 10 PM.   It will only run, if the tank is full.    So it becomes idiot proof -  Even I will not have to attend nightly to run it.    A simple mechanical fill float on the  water line that fills the tank -  will cut off tank filling water, when it is full.    Once I find the mercury floats -  I can automate it.   Watering at night is the best method -  It gets the water to the roots, with least evaporation losses.

So hopefully by the end of next week - My sugar cane will be flush with good water and on a watering cycle.
I will try to snap some pictures and post them as well.

Keep in touch, as the saying goes....   

These bulletin boards / Blogs - all work the same way - some people enjoy them,  some people come in just to complain.   Its an outlet for what ever is a persons mind.   No one should stress out over a post.  Dont like it  - Dont read it,  cant get any simpler than that.   
Lots of folks struggle (myself included) - with Locals,  because dealing with locals takes a lot of explanation, and often things do not come out exactly right.  Often the local people will do it the way they want, regardless of the instructions given.   After a while it builds up a lot of resentment,  because things dont work here, the way they do in the US or Europe.   LIfe is not perfect.   

Foreigners here tire of all if it all quickly.  People get worn out from the experience.   I have quite a few expat friends who burst into flames in anger, when dealing with Thais (like public servants, merchants, or customer services).   On the highway riding with me they melt down over the traffic movements.  They vow over and over to never get behind the wheel, or drive in Bangkok,  or any host of self limits, to suit the inner rage they hold because the driving is harder here.        

In the end -  Working with Thais here is Thailand - Is always a part of the game plan.   They are cost effective labor,  even if the work requires adjustment along the way.  One either has to do it all by ones own hands,  or step up and make the efforts to use local labor.   For me the choice is clear, I work with the locals,  and  deal with the rest of the consequences as best that I can.   

When you eventually settle in Thailand, and manage your land and projects -  You will see all these things with clarity.  

I will probably post some pictures as the irrigation system is finished, and perhaps some pictures on how the sugar cane is growing, because of the extra water during the dry season.   We are looking at at least 2 more months before rain begins to ramp up.  And really 3 months before we get good soaking rains on a steady basis.   So this irrigation system is really to benefit the December to May sugarcane crop growth.
I am late getting a start on it, because I mistakenly believed pumping from the pond was going to work well.   It simply wasted a lot of water, and that for sure is a no no during the dry season (even with a big pond)


Take care 

Pat

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## JHON53

Hi Pat,

it is been a while bud I had a lot of work here and there was not too much news.Now my wife is back since one week and we had time to talk it all out.So we will continue for two years with our new manager and his wife.
If in two year there are still a lot off problems and trouble with the family than they know it is game over.
My wife already found someone who wants to pay a good price for our land.In a few years the land more that tripled in price and I don't think that it will go down.

Also my wife told me that they are planning to build new factory's;one on the other side of Udon Thani and one in Loei.That would be better for the price because now the factory in Nungbua has to much sugar and is putting the price down because they all have to come to the same factory for the moment.I don't know if the factorys pay all the same price?

The only problem we have now that the truck driver try ed to put up his price to high so my wife told him next year he does not have to come back anymore.She says that you can buy a sort of trailer you can pull with a tractor so you don't need the truck anymore.And with the tractor it is only about 30 minutes to the factory so I think this is a good solution.
Because this year the driver sometimes had to wait two days before he could deliver.Normal that he was getting nervous.
And for the rest we have agreed that she only would let her family do all the work;they are already with 8 people so I think they can do it even it takes a little longer.Better to pay the brothers than the neighbours who make a party every day!

So that's the last sugar news.It seems the weather in Thailand is doing strange things these days specially in the South?
Lets hope that in Isaan things stay calm.........

 I will be waiting for the pictures from your irrigation system.Looks pretty good bud for sure a lot of work.

Take care Pat

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## JHON53

Hi Pat,
one more question.Ik know you already explained it all bud my wife likes to know how much you have to pay for transport(truck?)for 1 rai?
Jhon

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## MakingALife

> Hi Pat,
> 
> it is been a while bud I had a lot of work here and there was not too much news.Now my wife is back since one week and we had time to talk it all out.So we will continue for two years with our new manager and his wife.
> If in two year there are still a lot off problems and trouble with the family than they know it is game over.
> My wife already found someone who wants to pay a good price for our land.In a few years the land more that tripled in price and I don't think that it will go down.
> 
> Also my wife told me that they are planning to build new factory's;one on the other side of Udon Thani and one in Loei.That would be better for the price because now the factory in Nungbua has to much sugar and is putting the price down because they all have to come to the same factory for the moment.I don't know if the factorys pay all the same price?
> 
> The only problem we have now that the truck driver try ed to put up his price to high so my wife told him next year he does not have to come back anymore.She says that you can buy a sort of trailer you can pull with a tractor so you don't need the truck anymore.And with the tractor it is only about 30 minutes to the factory so I think this is a good solution.
> ...


Sorry to report, my baby girl just walked by and shut off the PC without me realizing what what was happening so I lost a good post to reply to you....  A post that took over an hour to think and write down...

In a nutshell -  You wife is doing all the right things.  It will either work out in 2 years or it will not,  you have good options either way !!!!

I dont have time to retype this post.  but in a nutshell my irrigation system total coast ran about 230,000 Bhat.  Including the (2) wells that I sunk and their respective pumps and cabling.    The system will be used about 5 months per year on a partial use basis to give good water to the cane.    I anticipate it will improve yeilds to the highest levels achieveable in my local area of about 16 T / Rai over my last years yeild of 10 T/ Rai.    Electric costs for annual use will be between 40,000 to 50,000 B.    Gross revenue increase by (now having 10 Rai planted vs 6.5 rai) and the increased in yeild will be about 92,000 B.  Taking out the power cost leaves about 52,000 B / year profit increase per Rai.   This is a doubling of my expected return per RAI - lookng at (3) year crop cycle.  The system designed has a 15 year life for pumps , with drip tubes at 5 year.    The system asset cost for 15 years is 116,000 Bhat, and increased profits are 780,000 B..  So the system produces about a 6 fold return in 15 years of operation. 

This easily justifies its first costs.   More than this benefit,  It makes the crop hearty against any sever drought that stunts and kills sugarcane crops in the ground.   This benefit alone is very significant.

It is enough to say, what I have done with this system isnt open to most farmers.  Most cannot afford the 230,000 outlay.  More importantly most farmers will not have electric on their property with the capacity to drive such a system.    Two large reasons why most cannot do what we have done.   Lastly,  We were lucky enough to hit (2) gusher water wells.   With a total flow of about 350 Liters / minute steady state.

We have truely gotten lucky in that respect.   The water and irrigation system advantages, together with full system automation makes it easy to run, with almost no labor.  I check run time metrics daily and drive the land to look at water patterns in the soil.

Sorry to have lost the longer post - where I put down all the numbers and details.   Send me your e mail and I will resend this information to you.    I have farmers neighbors who boarder my land who have put in wells years ago...  but they hand pump water for livestock.   Electric power on their lands, was a bad story of glad handed gouging on the part of quotes from the local utility.  One of the land owners is a major school administrator.  He told me his quote cost for single phase power...   Way too expensive.   It took us about 6 months of negotiation, and envelopes to get our 3 phase service into the property.  It wasnt cheap, and was brought in for a different purpose.   But the price wasnt a gouge on the order of magnitude given in price quotes to others.   We got our install for labor costs + materials and no gouging.  Of course it took an envelope to a few to make that happen,  but it was a fair price for that electric service.     Now our irrigation system uses about 50% of our power capacity,  leaving enough reserve for other needs.

OK Jhon...  I will have to answer your transport cost in a separate post

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## JHON53

Hi Pat,
just take your time.My e-mail is sly51[at]telenet.be
I also think we are on the good way now.I will soon feel if the oldest brother is in control or not.Bud as I told you before,I think the realise now how much they could loose if they don't give in a little.Her idea now is to take out as much people as possible and let the family do the most of the work.This will save already a lot of money at the end of the season.

For the moment the only problem is the transport and this is something we will have to work out from here.Bud we have time for this.

Very impressive your irrigation system;I hope it will work as you hope.

Take care

Jhon

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## MakingALife

Jhon,

I was in a hurry to type my earlier post -  It came out kind of confusing.  The expected revenue increase of 52,000 B (average per year, of a three year cycle) for my area in plant.   This figure has to be divided by 10,  because 10 Rai are planted.   That's a 5,200 B/Rai increase.    It is about a 100% increase over the approximate earnings, without such a system on a per Rai basis.   

Yes, It is a gamble to put such a water system in -  because it will take anyway about 4 years of the increased earnings just to recover first cost back.   

The part of the system that ends up written off  as useless in 15 years,  is the 4 pumps and three complete sets of drip tubes.   Replacing those assets would run 116,000 Bhat.   Eleven remaining years after the initial first cost is recovered,  would generate about 570,000 B, more than enough surplus funds to replace those items over the 15 year life.

I neglected to mention that the drip tubes are going to have to be disconnected and removed.   Rolling them up on spools,  so that they are not damaged during the cane cutting.  For sure the machete's used would slice up the drip tube and render it useless.   It all comes apart easily.  

Its a bit forward thinking to put this system in.   I had concerns about the well longevity.   The driller (who has been drilling for about a decade)  said that typically a water resource that came in this strong is not really capable of being exhausted by the pumps.   

He said over time the more the well is used - the higher the flow rate will become, as the rock structure opens up more.   He said most wells that are weak are pumped dry in 30 to 40 minutes with a 1 HP pump.   IF the water flows past that time - Its considered a strong well.    In my case, the pump's used were 2 HP - 14 stage, discharging with a 2 inch pipe size.    The wells flowed a full stream for more than an hour each at first testing.   It was an impressive sight to see.    

At this moment -  collectively the well  pumps have run more than 80 hours of service, and are still filling the large tank (20 m3) in about 53 minutes.  The time for the well pumps to fill this tank has not really changed since getting both well pumps in service. 

Next dry season -  We will likely be steering away from 2nd crop rice in two of the paddies, and opting for a higher return crop with lower water demand.   This will allow the pond water to give more alternative  cropping, instead using a lot of it on the 2nd rice crop.

The drip system for good tube life, requires relatively clean water.  (2) large capacity 150 mesh filters are in service for the system.   The drip system could run on pond water with the filters being used,  but I prefer the well water, which is sparkling clear.  It will give the best life for the drip tubes.  

I will try to get some snapshots posted of the layout, and possibly some drawings as well.   I still have some work to do -  such as making an enclosure for the pumps & controllers - to keep any fly by night riff raff from walking off with the gear - on some dark night.   

Likewise - I am still working to get all the sugarcane rows in a full growing cycle,  as the months time of getting this system up and running may have set back some of the second growth sugarcane.   Good progress has been made in the last 3 to 4 days, but not out of the woods yet.

The other plus of the irrigation system, is that I incorporated a small 2 inch fertilizer injector into the system,  So that fertilizer can be mixed with water, dissolved, and sucked into the water stream that goes to the sugarcane.   This allows easy feeding of fertilizer, without the need to pay someone to walk all the rows with a pump sprayer with water and fertilizer mixed in a back pack tank.   

Take care

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## guyinthailand

I  doubt the figures given here for profits made because I don't believe  every baht is being accounted for.  To do this, one would have to write down every baht spent on fuel  purchased to drive to fields and for fuel while tractor is on fields;  every baht spent 'out of pocket' buying fertilizer, insecticides,  equipment--you know: when your wife--the recipient of your funds--comes  to you, the Bank, when you're watching your favorite show or are  otherwise busy and says "Ti  Rak, I need 150 baht for a can of fertilizer"--and you hand it over  without thinking much less writing the expense down; And remember that  your business partner is the woman who gives you back rubs, sex, cooks  and cleans and so you aren't exactly always in a business frame of mind  when she uses her "allowance" to buy things for the sugarcane  'business' and you don't write down these expenses either.  And don't  forget the "whiskey fund", that is, the amount you spend to buy whiskey  to keep workers happy.  To drive a non-tractor vehicle costs about 50  U.S. cents --16 baht per mile--when insurance, upkeep, fuel, original  cost, etc are factored in.  So be sure and write down every mile/kilo  driven on your project and multiply it by appropriate amount.

Every  minute spent working in field for every worker--even if those workers  aren't being paid you need to write those minutes down, too, to be  honest with the true costs; every minute spent talking about and  planning; every minute spent by anyone doing anything connected with  this project.  Of course, there is no 'time clock' for workers to punch  in, but, if there were, I think you would be shocked at the true figures  for all the labor.

And don't forget the money spent to  originally purchase the tractor and the  land, and the interest on the tractor and the land.  (You couldn't find  these figures out anyway because Thais don't even understand the true  interest rate they are paying when they buy things on time. They tell  you they are getting the advertised 7% but when you closely examine the  fine print it is really 21%.)  So good luck trying to arrive at a fair  figure  for what the use of that  tractor really, truly costs.  Even if those costs aren't born directly  by you, you still need to account for them to see what the true costs of  growing crops in Thailand is.  Even when Thais buy chemicals etc they  often borrow the money to do so at outrageous rates, but when you ask  them how much was that bottle of chemicals they tell you the price on  the tag in the store--not the true cost including interest.  

Add  all these bahts and minutes up, subtract them from the sales, and I'm  pretty sure you will find that you have enough left over to live like a  majority of Thai farmers: in a leaky hut eating white rice with bits of  pig meat while staying in perpetual hock to the money lenders.

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## alwarner

^buzz kill.  with respect, of course.

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## superman

Guyinthailand you really nailed it as to farming in Thailand. I've been telling farangs the same for years when they say the wife/girlfriend want to buy some farm land. A green is on the way.

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## MakingALife

tra


> I  doubt the figures given here for profits made because I don't believe  every baht is being accounted for.  To do this, one would have to write down every baht spent on fuel  purchased to drive to fields and for fuel while tractor is on fields;  every baht spent 'out of pocket' buying fertilizer, insecticides,  equipment--you know: when your wife--the recipient of your funds--comes  to you, the Bank, when you're watching your favorite show or are  otherwise busy and says "Ti  Rak, I need 150 baht for a can of fertilizer"--and you hand it over  without thinking much less writing the expense down; And remember that  your business partner is the woman who gives you back rubs, sex, cooks  and cleans and so you aren't exactly always in a business frame of mind  when she uses her "allowance" to buy things for the sugarcane  'business' and you don't write down these expenses either.  And don't  forget the "whiskey fund", that is, the amount you spend to buy whiskey  to keep workers happy.  To drive a non-tractor vehicle costs about 50  U.S. cents --16 baht per mile--when insurance, upkeep, fuel, original  cost, etc are factored in.  So be sure and write down every mile/kilo  driven on your project and multiply it by appropriate amount.
> 
> Every  minute spent working in field for every worker--even if those workers  aren't being paid you need to write those minutes down, too, to be  honest with the true costs; every minute spent talking about and  planning; every minute spent by anyone doing anything connected with  this project.  Of course, there is no 'time clock' for workers to punch  in, but, if there were, I think you would be shocked at the true figures  for all the labor.
> 
> And don't forget the money spent to  originally purchase the tractor and the  land, and the interest on the tractor and the land.  (You couldn't find  these figures out anyway because Thais don't even understand the true  interest rate they are paying when they buy things on time. They tell  you they are getting the advertised 7% but when you closely examine the  fine print it is really 21%.)  So good luck trying to arrive at a fair  figure  for what the use of that  tractor really, truly costs.  Even if those costs aren't born directly  by you, you still need to account for them to see what the true costs of  growing crops in Thailand is.  Even when Thais buy chemicals etc they  often borrow the money to do so at outrageous rates, but when you ask  them how much was that bottle of chemicals they tell you the price on  the tag in the store--not the true cost including interest.  
> 
> Add  all these bahts and minutes up, subtract them from the sales, and I'm  pretty sure you will find that you have enough left over to live like a  majority of Thai farmers: in a leaky hut eating white rice with bits of  pig meat while staying in perpetual hock to the money lenders.


Indeed your points are well taken here in your post, and your methodology to compile all the hidden costs and time are detailed and accurate.  I dont disagree with the careful cost compilation method you are referring to.  It is well to note my land is 0.7 Km from my residence, so commute costs are low. The modern home is paid for as well.  I studied engineering economics (many years ago), and am aware of how to do detailed economic analysis, that take into account time value of money, and incorporating calculations for internal and external rates of returns, and applying tax treatments on profits to look at total investment returns.   

But I  haven't applied that kind of vigor to the question of what is left in my pocket from doing sugarcane as a crop.    I wanted to keep it simpler and provide a more basic breakdown.   In a country where rural agricultural labor runs 70 cents per hour at best, it means outsourcing farm labor remains viable, when labor saving methods are used. I dont compare this farm operation I am involved with - to a typical Thai farmer, because  farangs have different capitalization levels and can approach farming differently.

The costs / revenue numbers I generated were based principally from sitting down and putting these items into a spread sheet, going over with the wife all resources used in the first year cane crop and yield recovered.  She gets receipts when ever practical, and they go into an envelope for later review.     In other postings, I made a short analysis for the irrigation installed to supplement dry season conditions for the cane crop.   

There was no capitalized cost for the tractor or land in either set of compiled numbers.  I dont break out tractor costs, but instead I used the equivalent costs for hiring a tractor were used in the calculations, based on what one can be hired for in my town.

Although the wife purchased a tractor, and it is  already bought and paid for on a 2 year - 0% interest offer from Kubota.  It required a sizable down payment that is out of the price range for most.  And YES - I summed the total payments and down payment to confirm it was  a true "zero" interest deal.   The only "extra item" paid for the tractor was the license plate registration costs, and cheap tractor insurance.   Kubota offered a generous incentive of giving out 1 Bhat Gold jewelery for the machine purchased so it was a nice incentive added on to zero finance costs. 
It was as well a nice way to establish good credit, with real institutions and not loan sharks.    

In about  3 years of ownership this machine has about 1300 service hours, because it is used for the majority of the dry season in another venture. (a non farming venture).  This other work has recovered about 60% of the original tractor cost (after fuel costs are taken out).  Its use for farm related work on the land is limited.  

The numbers included in my posts are the hard costs out of pocket (soil pre-treatment, land turn over, commercial planting services, purchasing planting cane, commercial fertilizer and its application,  pesticide applications, weed killer and application, and the harvest labor and transport costs).    

I have a step son who handled the tractor work preparing the land in the first year, and in the 2nd year for the new sugar cane area under cultivation.  While his labor costs nothing, the cost was accounted for indirectly, because I used the commercial hire rate for a tractor for the land work time required.

The goal of the rough numbers was to give a prospective on the cash flow over expenses, and an estimate on a per Rai basis for my area.  This was designed to replicate what is a reasonable expectation for a farang becoming involved in a farm business.    Farming is not get rich business.  It however can be sustainable and renewable income if approached correctly.   As diversification is enhanced, the return goes up.

You are correct that a Thai farms profit level is considerably lower (even subsistence level only) if every single item has debt service associated with it.   Most only farm one season, and are engaged in other work or job pursuits.   They cannot subsist on their limited farm income alone.  Yes there are poor farmers who subsistence on their farm income alone but that is mostly older people.  Commercial farmers - who are 12 months per year in that profession across a diversified farm are rare.  I am guessing about 5% to 10% maximum of all farmers.  

Clearly my situation is different from the spectrum of other Thai farmers.   There is no outstanding debt service involved.  I did not make this clear in my accounting.  As well, The carrying charges for land are almost zero here, and the land valuation is recoverable if the land were to be sold.  

The parcel was bought cheaply and has increased in value, not only because of some improvements, but also in a strengthening of the bhat as a currency.    These reasons are why no detailed cost for land was included. Owning the land, depreciation does not really apply,  as farm land retains its value and actually increases its value when cropping diversity and multi season utilization is added into the mix.

These are things that many Thais cannot integrate, because their money management practices and funding level is often not high enough to explore the full capacity of their land.

Farming is sustainable, if there is good money management and capital reserves are maintained to offset more crop diversification and periodic unanticipated costs.   I grew up in Norther New England, in a rural town, with most farmers involved in the dairy business.   Same story there - farming is capital intensive, but sustainable with careful money management.  

The sugar cane cost / revenue projection reflects my rough costs.  The land plot also separately supports about 26 Rai of rice.  A pig operation that sells wholesale only with a nominal size optimized for 40 pigs in the marketing cycle (sold at about 100 Kg size).  A small chicken operation that yields eggs for local sale only.  And a new addition of 300 ducks, which will be used for duck egg sales (on a wholesale basis).   We raised fish for two years (non commercially), and harvested the last of them this spring, principally as a good food source.   The pond was discharged for this years for 2nd crop rice.   

The wife's parents tend to the live stock daily, and have one gal who comes in to assist them.  These items farmed does not include the (2) large vegetable patches in cultivation (one is the mothers, the other is my wife's).  These provide on average 90 percent of the garden produce our family consumes,  the rest is purchased at the whole sale market.  The worker who helps the wife's parents, assists with these vegetable gardens as well.  The daily excess produce from these vegetable patches are taken by this worker, and sold fresh daily to folks in town.   Those funds from sales, cover her wage.  Her family as well gets a share of all the produce they need.  So by being fair - we have a dedicated worker who assists with the operation, at relatively low cost.         

So as you can see - the more diversity that can be included in the farm ecosystem - the more bounty that can come from it.   I have not done the work up for these other farm venues,  but the land plot supports all of these activities and their is a synergy between them.   The pig waste flows by gravity to a small lagoon, and it is pumped out (via  sprinklers) on to the sugarcane -  which is a new addition this year as well, and it is expected to improve crop yield as well and in the future reduce some fertilizer costs involved.    Again - this item is not something that most small pig farmers incorporate, they let the pig waste run off their slab on to the ground - that nutrient stream is lost.   

There are many approaches that can be applied to farming.  It takes time, trials, and experimentation to figure out what corps work best for the plot in question.   As an example, a local farmer - discussed with my wife - companion planting corn in the new area of sugar cane planted.  He correctly identified that the corn will outpace the new sugar cane and not really impact the cane crop already put in.   So we have put in about 2.5 Rai of corn which has already come up.   Like other crops - It will be eaten in season,  surplus will be sold locally to meet local demand, and any excess will be provided as fresh produce for the pig operation.     My wife is currently researching a transition of these 10 to 10.5 Rai (now in sugar cane) to convert them over to a different group of crops - in 6 to 8 years.   This will be fruit based, and it will take time to grow the trees and get grafting or other items set up.   the mix will include lemons, and avocados, and I am not sure what else.

Sugar cane gives reasonable return if the harvest costs are managed.  The rest of the labor demands are very low.   Rice has very high labor demands, even though the revenue per Rai is higher.   We have experimented with these crops and are getting a good idea on where savings can be applied to the process.

As an example - We recently located a rice seed planter suitable for a large tractor.   The cost of this seed planting machine was about equivalent to the labor costs connected with growing seedlings and transplanting them for our entire plot for 1 season.  We got this tip from the person who ran his harvester combine to take in our 2nd season rice.   He has been using a small rice planter on his 130 Rai of rice land.  He said he purchased a seed planter and the harvester,  because of the cost and difficulty to get enough staff in to plant / harvest his rice crop.   He said the savings in labor cost are very significant by using both machines.    He said these labor savings, combined with the limited commercial work of his combine - Will have recovered the cost of both items when he completes his next rice season.    He said this equipment will increase his profits next year and beyond, and give him an advantage in the dwindling labor market during the rice season.  

The bottom line is that when farming is approached intelligently with some reserve capital investment, and other sources of income for stability,  Farming is a venue that can add to ones bottom line in retirement.  Resources are deployed strategically and labor saving methods are used, profits are achievable even with some outsourced labor.  My belief is that the return obtainable is higher than would be achieved if the same "investment pool" where channeled into traditional investments - when market risk and taxation on gains are taken out of that equation.   The farming return is higher, only when its done well.   

But people either like the business or they dont.  If one doesn't enjoy the process, steer clear,  because farming can be a puzzle that takes time to optimize.  That is a truthful observation and it goes with challenge of being in that business.

Obviously farming isnt a business for someone who prefers to spend days in front of the TV and nights clustered around bars.  It takes daily involvement and observation.  These things cannot be left to hired help alone, because too much can fall through the crack.  This means one cannot be in the farm business and lead a totally charmed life.  The two are incompatible.   
But likewise it does not require one to toil in the sun till exhaustion either, very far from that.

Between the few venues we are involved with,  I find my expat retired friends always doubtful or contemptuous, most of the time when these things are discussed in general about these venues.   They dont like the demands involved and believe all venues are nearly unsustainable in TL.   

I disagree with their assertions.    Most retiree's I know are content to live out their retirements, through frugality, accepting near zero risks, and with minimal outlay of their capital reserves.   Its living a life without challenge.  They make faces when normal weather induced farm risks such as drought risk are discussed.    Or when other business risks are talked about.  They dont envy the process involved, and have no desire to be in that same position.  Most however like the "cheap rice" when we get some processed and sell it at market wholesale pricing for them.  Its a premium grade product.  We consider the "cheap rice" to be the crap grades sold in most local eateries, only 4 and 5 star restaurants serve the premium homily rice we eat daily.     Same goes for garden produce given away.  When crops come in strong - giving some away to friends is part of the joy of farming.... Its all well appreciated. 

But the business is not anything that appeals to any of my expat retired friends.   The look at me as if I have rocks in my head....   For people comfortable with risk, and a willingness to accept challenges -  Farming becomes a rewarding venue to consider in retirement.  Its not a shoe that fits all, nor does it come with any guarantee.  Likewise its not a full time pursuit, nor do I depend upon it for subsistence reasons.     

Reading between the lines, it should be obvious that I am reasonably comfortable in retirement.   Farm development and other activities will become a legacy that will eventually be passed on to descendants - or sustained by my wife who is 10 years my junior.  These are additional reasons to consider engaging  in farm venues.   There are several expats who engage farming on these threads, and have done so for some time.  They do so with intelligence and care and enjoy the rewards involved there.

To think the farm business in TL is only low profit or subsistence at best is incorrect assumption.

Recently we were approached to front expenses for a 15 Rai plot of new sugarcane.   The offer included taking 100% of the first year crop and 50% of the second year crop.   After modeling costs...  The first years expenses would take 85% of the first year return.  Second year crop expenses would take about 40% of the expected 2nd year revenue.   Of which only 50% 2nd year return was offered as part of the deal.   I declined and considered it a gamble, as the plot and location had almost no water resource available on site.   This places the 2nd season crop yeild at risk,  so it jepardizes the the total profits involved.   We declined this offer because of the weakness in this sugarcane plot.   The risk level vs reward level was higher than we wanted to assume.    While the land owner (relative) considered her offer reasonable, Her belief in this offer discounts the second crop season risk, because of a lack of water resource.    This should give an idea about considerations that must be factored into doing Sugarcane.   We considered it for two years before planting our first crop of sugarcane.

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## guyinthailand

I  may be correct in saying farming in Thailand is not an easy way to make  money, but farming in Thailand may prove lucrative in the future, if  for no other reason than you may have food to eat while others don't.

With  increasing oil shortages, there will be more food shortages since every  time you sit down to eat you are, basically, eating oil. (Fertilizers  and pesticides are derived from oil and gas products, and of course fuel  is needed to  drive tractors, etc). 

So having the knowledge of how to grow  food will come in very handy and the concept of 'profit' in the future  may not even matter.  Those with food to eat will be the 'haves' and  those without will be the 'have-nots'.   Before the discovery of oil there were about a billion people on the planet, which is what the planet seemed able to support sustainably.  Oil and gas have allowed 'efficiencies' which have directly contributed to the population explosion (6 billion now and counting).  As the oil runs out you can be sure there will be many more mass starvations and die-offs than there are now.  (If you need any more convincing of this, then read "The Long Emergency" by James Howard Kunstler).

Anyway, a rai or three is all that is probably necessary to support a big family.

It  would be a good idea to cultivate friendships with those who know how  to grow  basic foodstuffs without petroleum-based fertilizers and pesticides,  since those things will be scarce in the future.  Thailand knew how to  grow foods without these things before the advent of petroleum based  products.  Surely that knowledge is still around.

All hail the 'lowly' water buffalo.

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## MakingALife

> I  may be correct in saying farming in Thailand is not an easy way to make  money, but farming in Thailand may prove lucrative in the future, if  for no other reason than you may have food to eat while others don't.
> 
> With  increasing oil shortages, there will be more food shortages since every  time you sit down to eat you are, basically, eating oil. (Fertilizers  and pesticides are derived from oil and gas products, and of course fuel  is needed to  drive tractors, etc). 
> 
> So having the knowledge of how to grow  food will come in very handy and the concept of 'profit' in the future  may not even matter.  Those with food to eat will be the 'haves' and  those without will be the 'have-nots'.   Before the discovery of oil there were about a billion people on the planet, which is what the planet seemed able to support sustainably.  Oil and gas have allowed 'efficiencies' which have directly contributed to the population explosion (6 billion now and counting).  As the oil runs out you can be sure there will be many more mass starvations and die-offs than there are now.  (If you need any more convincing of this, then read "The Long Emergency" by James Howard Kunstler).
> 
> Anyway, a rai or three is all that is probably necessary to support a big family.
> 
> It  would be a good idea to cultivate friendships with those who know how  to grow  basic foodstuffs without petroleum-based fertilizers and pesticides,  since those things will be scarce in the future.  Thailand knew how to  grow foods without these things before the advent of petroleum based  products.  Surely that knowledge is still around.
> ...


I am in agreement with you here. You observation about profit being secondary will probably prove correct as well.  No question that farming in Thailand is a challenge.  I observe many in my town who work hard, against the water and weather risks, to push yeilds and diversify what they attempt to crop.   

I see a lot of crop failures, mostly in attempts made in the non wet season.  Most crops fail because the irrigation source has run out. Even this year we lost 5 Rai of sesame, because our water infrastructure was not yet to be available when it was needed.  We gambled, got the crop in too late, and hoped for some rain, but it did not happen. It takes some money spent to improve farm resources to overcome some of those hardships.  In many cases these funds are out of reach for may Thai farmers.  There are low cost pond schemes available in most towns, with a time payment plan associated with them.   When the true cost is worked out - Its obscenely high, at multiple times the true cost to actually digging the pond.  

There are several older men in my town who have small sized herds of water buffalo (around 8) which they graze and likely use.   Fine looking and powerful animals.  No doubt it takes a string of animals, because they must be rotated or rested to sustain plowing activity.

Your observations about world changes in a post peak oil era, are not all that far into the future.  Perhaps 20 years, at best, will be the transition period before oil and its derivatives become prohibitively expense for many.  They will remain in use commercially but such food costs will rise exponentially as well. The impacts will produce large displacements, and changes in population trends. 

Agriculture on a large industrial scale, will likely mutate because of fuel and other resource scarceness. Likely smaller growing system such as "permaculture" will emerge, as it remains sustainable and high yeild.  
World population density and location is such that in many countries, population demands had taken over the coastal plains, which are the traditional location for many countries bread baskets.  There is no question that large blocks of population depend upon industrial agriculture to get their sustenance.  Consequences will follow as agriculture mutates.

I researched the development of the present fertilizer industry, from its earliest roots, as a conversion of technology away from the munitions industry after WW1.  The industry was pushed and commercial nitrate compounds became ingrained in agricultural practices.  No question their use can transform weaker soils into higher productivity.   The USDA did extensive research in the 30's and 40's about the impacts of these commercial "manure's" and found that microbiological processes in soil are severely reduced by fertilizer application.  These biological processes are bacterial based and they are responsible for making many mineral compounds in the soil able to be uptaken by plants.   There is no question commercial fertilizers can produce crop growth,  but the diverse mineral contents in harvested crops are reduced significantly.   The crops are green and tall and bear good yield,  but the nutritional within that yield is lacking.  The pioneering extensive study work done by the USDA was buried because of the influence of the chemical conglomerates in the US,  who profited handsomely from this conversion of their original business models.  Principal scientists were personally attacked and discredited, its another untold railroading story undertaken in the name of profit. 

The impact of large fertilizer use - to the point of disrupting soil microbiotics, results in plants with less mineral content.  This leaves the plants at much more risk for pest attacks and other impacts.  This has caused the proliferation of pesticides. Which are an additional benefit of those in the chemical business.     These methods kill top soil and impact crop nutrition. 
There is no question people are easily sustained by these crops,  but loss of minerals in the diet has health impacts.   Use of pesticide is not normally needed in organic based farming methods.  

There is a great book written on this subject called "Empty Harvest" which I read in the late 90's.  Thailand suffers with weak soils in some provinces which has created the opportunity for fertilizer use to explode, and with it the need for more pesticide applications as well.   Its a catch 22 situation for sure.
Driving around its pretty easy to most fields left in fallow after wet season rice,  dont have sufficient bioactivity in the soil to even break down the dead rice plants left behind. This happens in part because of the low moisture environment from dry season weather.  There is not a lot of effort being made to educate farmers in alternatives to commercial fertilizer use, but some farmers I know in my area use alternatives from cow, pig, and chicken farms, as well as sugarcane waste products obtained from the sugar mills.  These alternatives are priced cheaper than commercial fertilizers,  but require more labor to use.

There is no question post peak oil the agricultural deck will be reshuffled, and impacts will be felt.  Trends like permaculture, hydroponics, aquaponics, high protein algae cultivation, and other methods will expand because that are adaptive to many non traditional agricultural areas and are low resource use per unit of yield.  Of these only Permaculture will be capable of producing plants with their full nutritional value - because that method is based on holistic robust natural soil.

Agricultural land, with developed water resources, properly managed, is a low risk investment, Particularly in TL where land carrying costs are extremely low.   

When people recognize the future picture you have raised, the idea of a small piece of workable farm land will have more merit.  For many foreigners who have retired here -   looking out 20 years into the future is is meaningless.  For those who look beyond that time horizon and consider the benefits to their descendants, then becoming involved in farming worthwhile.  There are no sure things, only probabilities and outcomes.   

Controlling the healthiness of food production is worthwhile, considering present pollution levels and marginal practices in many areas of food production.  

For example the whole sale pigs we raise, are fed a high protein diet consisting of commercial pelleted food & the bran removed in rice finishing operations.  The animals "self feed" 24 hrs /day with the simple demand feeders in use.  Use of high nutrition foods and auto feeders, shortens the market cycle.    The hogs are significantly leaner and better in flavor.  The small barn design lends itself to keeping the animals cleaner and disease free, without a need for pharmaceutical treatments.  The space is open and airy, and its shielded with netting to reduce mosquito influx, and larger netting to keep out birds.  These very simple bio-security measures are not in use on small pig farms.  They reduce animal health risks and stock loss.   Pig stock comes from a dedicated breeder, who happens to be a veterinarian and a commercial feed wholesaler.  These enhancements to the quality of pork produced, reduce profit levels by a small amount,  but offer enough sufficient value added (selling at market price), that we have three principal  wholesale pork slaughters who will take all we can produce.  It took 9 months of production to establish those relationships, but pork wholesales are very happy with the meat product, because their profits are higher.  This situation means we have no marketing cost involved, and can sell without a need to price gouge.   Everyone involved in the production chain benefits from the intelligence  they put into the production choices.   Its an example of what can happen when people work together intelligently for sustainability.   

Clearly I could expand channel pork profits into expanding the operation,  but I dont plan to - because its the right size to generate the right amount of waste available for the cropping efforts on the farm.  Pig waste is very potent and easily can be overdone.  Expanding the operation would require, exporting the waste.  There are plenty of pump trucks that would be willing to make pick ups,  but that process will expose the pig farm to some bio risks from potentially contaminated equipment being on sight weekly.  Such a development places a large amount of livestock at loss risk.   In the end, risk factors make expansion of the pig operation undesirable.  Currently about 2500 Kg of stock is turned over every three 1/2 months.  This will grow organically to about 4000 Kg every three months when the (4) breeders hogs are in full production. Eventually the production will be synchronized into around 1000 to 1200 Kg/Mo of stock turn over.   Using breeders saves production cost  Current return average cycle return is about 35 to 40% when costs for commercial food, rice bran, and the part time labor cost is taken out.   Our last sale was 62 B/Kg live weight.   Currently pricing now is in 70 B /kg live weight.   Profits ranged now around 17-1900 USD for a 3.5 Month cycle (at 2500 Kg turn over).  With current pricing and full breeder utilization, cycle profits two cycles from now will be  will be raising to about 3700 USD - (with 4000 Kg turn overs).   With initial barn and outfitting costs ran  around $6000 USD.  These initial costs will be fully recovered before the operation reaches full production.  Its an other example of what is currently sustainable and profitable in the current time line in TL.  

But it took research to put it in place.  I studied barn designs, and compared what some small local producers were doing.  Eventually I designed the barn and had it built.  Since I am retired, I do not include my time into those initial efforts.  I inspect the operation twice a week (a 10 minute walk through), and fire up the effluent pumping about once every 10 days.  That is about the extent of my involvement in the operation.   The eventual cash flow profit will add about 10 to 12 K USD per year at full production.   Reserve operating cash flow will expect to require an amount equal to the average profits.  So this means that about 10 to 12 K USD will be held in reserve  across a years time.   This requirement makes it impossible for most Thais to boot strap and sustain their own equivalent venture.

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