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Economics of Rice Farming


vision25

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Does anyone know anything about the economics of rice farming.

 

My wife is buying 20 rai of farmland near Sa Kaew for 200,000 bt (using her own money :eek:).

 

Is this a good deal.

 

She has told me that the large bags of rice sell for 400bt but can't (or won't) tell me how much rice 1 rai of land will produce.

 

So, how profitable is rice farming .::

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Some years a rai produces more and some years produces less. I got this direct from some Thai farmers. Other words, you just do not know.

 

Price of land sounds okay. It could be a steal or it could be a disaster. Where is it located and what is the zoning (sic)?

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I am no expert in rice farming but spent Chinese New Year down in Surin with my mate and his thai wife. She [his wife] seems to be quite an astute business woman and appears to be buying land at a phenomenal rate (courtesy of my mates wallet) and is paying a lot more for her land than your wife has paid. I believe she just bought 20 rai for approx 700,000 bht.

 

Whilst we were there she decided to bag up some of, what she called, older less profitable rice and ended up getting 14 baht a kilo. This appeared to be a good rate but was down to the fact that Surin and other areas in Issan are ideal for fragrant rice which appears to yield about 4-5 baht more than you bog standard rice.

 

I also understand that the current market for rice is very good as there has not been too much rain over recent years therefore rice is in short supply. Its that old addage of micro economics and supply and demand.

 

I enquired how her family would farm the newly aquired land. In a nutshell, she will lease it out and take 40% of the profit from the crop. Sounds good to me but what do I know. My concern was that there appeared to be no entering into contracts with the smaller farmers she was going to lease the land to. Very dubious but then I aint a thai rice farmer whose hubby has a large wallet..... I just eat the stuff :p

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How many crops a year you can get will be a large factor in the value of the land. Some areas can only get one crop, others up to 3. Will the water have to pumped in to the paddies or are they low enough that pumping is not needed most of the time? Are the dikes in good shape or do they need reworking.

Lots of factors affect the price.

TH

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I had a look at the land that she had aquired and the irrigation system appeared to be very good including bunded pits which acted as a reservoir for storing irrigation water. These bordered the deliniated area of the land. However, I am not sure how fertile the soil is although the close proximity to the river will have provided some sort of aluvium plain effect.

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Well Lanna Thai (land of a million rice fields) has done ok with it. Thai rice is a premium product in the west and a smart marketer could do some things with even a small operation ....... same with coffee.

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agreed, I do believe I mentioned 'smart marketer' ... creative, small focused upmarket, etc .......... need to be able to handle both ends IMO, or one can just be part of the BIG wheel.

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