An Analysis for Cost and Return on Sangyod Rice Farming Investment of the Farmers in Five Provinces of Patthalung

Abstract

            This research studied the general background, cost, and return on investment of Sangyod rice farming investments in the farmers of five districts in Patthalung province, namely: Muang, Khuankanoon, Pakpayoon, Khaochaison, and Bangkaew. The sample of the study was 196 farmers from the farmer population of 400 who joined the “Patthalung Sangyod Rice Farming Campaign Project.” Questionnaires were used as the data collection tools of the study.

                The research found that among the five districts of origin, most farmers who joined the project were from Muang (22.79%), Khuankhanoon, and Pakpayoon districts (22.06%). The farmers’ family members consisted of  1 to 3 people. The most represented category of the monthly average income of these farmers was 1,000 to 10,000 baht (66.92%). Sangyod rice farming areas were classified into three rai-sizes: 1 to 10 rai (small), 11 to 29 (medium), and larger than 30 rai (big).

                The most represented category of the average area of farming owned by each family was 1 to 10 rai (82.35%). Most of the land ownership was held by the farmers. 87.35% and 71.43% of the farmers took ownership of the land sized 1-10 rai and 11-29 rai, respectively. 90% of the farming area over 30 rai was both owned by the farmers and rented. 86.03% of the farming was financed by the farmers themselves with 13.97% under loan support. The most used lending rate was 30,001 to 50,000 baht (42.86%). The main distributors of the Sangyod rice were the rice mills available in the areas (67.06).

                The results of evaluation and analysis of the costs for the Patthalung Sangyod rice farming in different size areas discovered that farming on 1 to 10 rai (small area), was more worth investing in than in the bigger areas. The smallest farms’ Net Profit Value (NPV) was 11,601.83 Baht, Benefit Cost (B/C) ratio: 1.63, and Internal Rate of Return (IRR) value: 20.02 %. While farming in the biggest areas (larger than 30 rai) presented its NPV as 9,722.82 Baht, B/C ratio as 1.47, and IRR as 17.02 %, the NPV of farming in the medium size areas (11 to 29 rai), was 7,859.66 Baht, 1.45 B/C ratio, and 16.90% IRR value.

                An analysis of the problems in the investments revealed that, overall, the farmers’ major problems were in: 1) Production: Lack of water for agricultural farming due to unseasonal rain levels as they were in need of help from the National Irrigation Department (7.69%). 2) Cost: Farmers were to pay for all farming processes and their costs were high, up to 3,500 Baht per rai (7.69%). 3) Marketing: Very few markets requiring Sangyod rice caused farmers to sell their rice to the Cooperative’s Rice Mill, which gave a good price but always delayed the payment (12.82%). This caused farmers to be in need of help from the government as the intermediary lowers the price when the rice quantity increased (12.82%). (4) Major requirements: The farmers needs are indicated in percentages as follow: (4.1) Payment in cash from the Cooperative’s Rice Mill because of delayed payment in previous years (5.13%). (4.2) The government’s help in providing markets for common sellers (2.56%). (4.3) Better Sangyod rice seeds provided by the Department of Rice Research as the current seeds are unsteady (2.56%). (4.4) Funding with low interest loans (2.56%). (4.5) Having the prices raised (2.56%). (4.6) Better suggestions and advice from the rice experts (2.56%).