Monday, April 25, 2016

Why Bamboo???

This question was asked of me several times by both friends and some of the locals in my area.  Its a good question as there are no bamboo plantations in our area and most of the farmers around here grow only rice.  

The answer I give to everyone is that I think growing rice is a failed business model.  There are too many farmers who are going broke in this area from growing rice.  Its hard work and the returns are small.  Its highly weather dependent and the lack of, or too much water can easily ruin the current crop and force many farmers who take out loans for seed and fertilizer to get into big trouble. Unfortunately, while these farmers are really good, hard working people, they have not been trained or know of any other way of making a living except to grow rice. They have been doing this kind of farming for generations and change is hard, especially when considering that just 10-15 years ago, much of the heavy plowing work was still being done by bisons.  

bamboo can be used for timber, flooring, and furniture

bamboo groves at a small plantation
I started to research alternative crops when we first decided to buy the property next to us.  Crops such as soybean, cassava, corn, etc., also are very labor intensive and while the returns were a little bit better, none matched the returns from Bamboo.   Some studies show that the internal rate of return on bamboo is around 31% each year on investment.  That is the kind of number that I was interested in.

The disadvantage of bamboo is that it takes 5-6 years before one can get their first harvest, and there is considerable investment needed in acquiring the stock, preparing the land, and nursing the small plants until they are big enough to be planted in the ground.  Not too many farmers can wait that long for income, especially if they are barely scraping by with their current situation.  Once in the ground however, and with proper care and maintenance, a bamboo plantation can produce a steady income for 50 years or more before having to be redone -- and that is the major advantage of this kind of investment.

These are moso black bamboo shoots...highly valued in Asian cuisine
 But I am taking a long term view of this and trying to build for my family's future.  We know that there is going to be a lot of curiosity in the area from other farmers and perhaps even the local government, but in a way its good as bamboo can be a significant crop in Thailand's diversity efforts when it comes to agriculture.  I know that I am personally very eager to see how all this turns out and am willing to invest the time and money to give it a run.

If other farmers want to copy and get into the business,  I won't mind as I will have a five to six year head start and besides its great for the area.  There is more than enough market to share - not to mention playing the carbon credits game...

Anyway, waiting for the workers to finalize work here.  Leaving for the mango after lunch and expect to be in tonight.

Three days left before jumping over to Kalifornia......

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