The Cost of Farming
Wherever in the world you are reading this from you are likely to be feeling some form of financial squeeze. Whether it’s the cost of food or other goods, the price of energy, or something else, it looks like we are all having to tighten our belts a little more.
It’s no different in the countryside, and while we don’t miss having shopping malls as our only form of weekend entertainment, which is pretty much the case in Bangkok and other Thai cities, the increased cost of living affects us here too.
Even before Russia invaded Ukraine many prices began to increase due to production and supply issues. When we were building the small house on the land at the end of 2021 the price of steel and other building materials increased on almost a daily basis.
Then at the beginning of this year the price of fertilizer increased dramatically. At the same time labour costs also increased. By April most farmers knew it was going to be a tough year.
At this stage we don’t rely on the land for our income, but it can provide a nice little extra. We’re lucky. Full-time farmers who depend on what they grow for their income are going to feel a very tight squeeze.
On the one hand, selling prices for the main commodities appear to be higher. The issue is they are only marginally higher while costs for fertilizer are increasing by up to 200%, and local people willing to work on your land will only do so for a higher fee.
So what do the finances look like?
Let’s take a look at the 5 rai – about 2 acres – of cassava we planted in November 2021.
Cassava, also known as yuca, is one of the most important economic crops for Thailand and around 80% of production is exported. Cassava roots are used to make dry chips and pellets for animal feed, native starch, modified starch, and some other industrial products. Modified starch can be used in the production of paper, textile, food and beverages, plywood, glue, and alcohol. It’s important to Thailand as the country is usually among the top three producers globally. It brings a lot of dollars into the economy.
Cassava field in the morning sun
Most producers are small scale farms like ours, although I’d say our 5 rai is definitely on the smaller side. I’d guess the average is around 10-20 rai per farm.
One of the beauties of cassava – and sugar cane, another key crop – is its hardiness. Give it monsoon rain, it grows. Give it months of hot, dry weather, it grows. It’s pretty low maintenance.
We planted our cassava in November, and harvested at the beginning of August, so it takes around 8 months to mature.
When I say ‘we’ planted the cassava, that’s a very liberal use of the word. Perhaps better to say the cassava was planted on our land! This also has a major effect on our return, as we used a lot of labour, and while it’s cheap by European standards it still mounts up.
In August we sold 18 tonnes of cassava for THB (Thai Baht) 3.05 per kilo. The price per kilo was up from THB 2.7 to 2.9 last year.
We got THB 54,000 for the lot. That’s about USD 1,500 or GBP 1,300
From our THB 54,000 we spent THB 17,500 on labour costs to plant, weed, and fertilize the crop, including the cost of the fertilizer. Labour and transport for the harvest, since we needed to rent trucks to take the cassava to the market, cost another THB 12,600.
That left us with about THB 24,000 ($650, £540) for 8 months work.
Not a lot.
At the same time as cassava was being harvested we also planted rice, so our profits were used again for labour costs. These costs were lower as it’s a real family affair, and the rice isn’t sold, rather its used by all family members throughout the year.
But the point is that profit from planting cassava “one of Thailand’s most important crops” was just over $130 per rai - over eight months. Not $130 per month, but $130 in total.
It’s not the only source of income for farmers but it is a major contributor, and of course most people plant more than we did. Auntie Mee, our neighbour, made about THB 50,000 for 8 rai after costs – she looked after her crop better and got a similar yield (28 tonnes from 8 rai) but a better price (3.2 per kilo).
She’s 74 years old and has few costs other than food and medicine, so it works ok for her. But it’s hard to imagine how bigger families get by.
How do people send kids to school and university? Own a car? Eat?
One answer is that people are resourceful. They fish, they grow their own fruit and vegetables, they find ways to make it work, mostly. And despite the criticisms from city people that people here are lazy, I’ve found anything but.
Unfortunately Thailand has one of the highest rates of suicide in the region, especially among farmers. And this report today makes sobering reading about the state of farmer's finances not just in Thailand, but across South-east Asia: https://www.mekongeye.com/2022/09/26/farmers-fertilizer-prices-rise/
It takes a lot of work to live like rural people have to. It’s about time they got a better deal, but it’s likely that the global cost of living crisis will only squeeze them harder.
I've written before about how Thailand's small scale farmers are hung out to dry financially, and in today's world where 'food security' is becoming more important on the agenda of politicians, it beggars belief that the food producers and the producers of crops that are a major contributor to the Thai economy are so poorly treated. Or maybe that's part of the plan. Put people in debt, take their land, sell to big agriculture.
In the article above one Thai farmers says “In the future, there will be no rice farmers anymore. Many of us are planning to stop growing rice. The more we farm, the poorer we are. Our generation may be the last generation of rice farmers.” Unfortunately he may not be wrong.
We've been busy testing out some crops and in the last couple of weeks we've harvested peanuts and corn. Not sweetcorn, but 'sticky rice corn'.
Both harvests have been sold quickly to local villagers due to an entrepreneurial mother-in-law.
Sticky rice corn
Peanuts were sold for 10 baht per bag, and bags of 6 corn were sold for 20 baht each.
It may never make us all financially rich, but there is another form a satisfaction in eating your home grown food!