I had the opportunity to watch a friend operate her rice business. She owns hectares of land grown with rice and she co-owns a couple of hectares with other farmers as well. I watched her bargain with a farmer about buying their unmilled rice and drying and milling the rice herself and selling it through her thriving store here in rural Misamis Oriental.
It is really amazing watching her actively bargaining the purchase from P11/kg to P10/kgs of unmilled rice. According to her, one sack of unmilled rice would net her 10-15 kgs of rice which is currently still sold at a thundering P35/kg here. The price of rice has gone down a bit from P46/kg. From where am at, I guessed that she must be profiting P20-25 per kilo of rice. Not bad!!!
I asked her how she manages her farms and she said as usual the key is finding a reliable and trust worthy farmer-overseer. Having worked with a huge production farm in Negros years ago, I had more or less some understanding on land preparation needed for rice production. What I lack right now is land. My friend actually asked me if I am interested in financing some farmers in our area, since most farmers here have problem with money to start seeding, planting to fertilization of their rice. Not mention, harvesting, drying and threshing of rice during harvest season… I asked her how much it would cost to do so. She quickly whipped her calculator out and said more or less P2,000 for 2 square paddies and that usually yields to 30 sacks of unmilled rice, which would in turn yield 12-15 sacks of 50kgs of rice. At the current price of P35 let’s say, gets P1750/sack. In total she’d get P26,250 total for 15 sacks of rice.
I am interested in co-sharing or financing rice production with some of the growers here. I do have P5,000-10,000 to pay around with and with P2,000 or more for a couple of paddies which would yield P20,000 or more… that is actually NOT so bad at all. The thing with rice production is it is labor intensive. Like for example, land preparation and planting would take a couple of days and a couple of people. Not to mention the one week of drying period before the rice is milled.
I asked my friend how she pays her farmers and she said she pays them with rice also. Sharing usually goes 60-20-20. 60 for the financier, and 20 to the farmer and another 20 for the rest who helped with the planting and fertilization. But mostly, these other farmers needed more cash and they end up selling their share to her also.
Not bad at all… Now if only I could find a farmer who needed a financier soon…
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