The economics of rubber growing is very complicated and returns are difficult to assess. The following figures are just a guesstimate of the costs and profits that can be obtained from rubber farming. There are too many variables to give concise figures but hopefully they should provide a ball park figure for anybody thinking about investing in rubber. One thing to remember is that it requires a considerable outlay for 6-8 years before any returns are made

Assumptions

These are the Assumptions I have made to come up with these figures

The price of land not included – varies two wildly.

• Pay for 1 days labour 300 bahts  – Minimum wage

• The Cost of hiring a tractor & driver at 250 baht a rai  (as of 2014)  has been assumed in the Start-up costs for  Ploughing or mowing twice a year to keep the weeds down. Ploughing is required for the first few years only to get rid of the hardier weeds and bushes thereafter just mowing should be sufficient – in fact continued ploughing is detramental as it can damage the roots. It becomes more economic to buy your own tractor the more Trees You Have or intend to Have. The economics of buying a large tractor is debatable since the only advantage is that it can be used in the initial ground preparation and ploughing which a small tractor can’t.

• Pruning – Can done by yourself – zero cost – and only needed for the first 3 years .

• No inter cropping – This is something we didn’t do so I can not give an opinion on the economics of this – Although I assume it must be profitable in some situations otherwise it would not be carried out by some farmers
• I have assumed it takes 7 years for the trees to reach sufficient size before they can be tapped .

• A Planting density of 80 Trees a Rai at a cost of 50 Baht per Seedlings giving  50 * 80 = 4,000 baht a Rai
• A Failure rate of 10% in the first year of planting – which have to be replanted

Other costs not included

• Purchase and possible clearing of the land
• Fencing off land
• Price for collection cups
• Fuel costs
• Eventual accommodation for your cutters.

Fertilizer Costs

We buy fertiliser specially prepared for Rubber trees which contains Nitrogen, Phosphate, Potassium and Magnesium. It  currently costs Nearly 1,000 Baht for 50kg Bags ( 2014 ) .  Here is a bag showing the amounts to give to the trees.

For those that don’t read Thai

• Small tree 50 grams
• Small Tree 1-2 Year 100-500 grams/year  applied 3 or 5 times a year
• Rubber 2-6 years 200-500 grams/yr applied 1-3 times a year
• Trees being cut 1kg/yr  applied  1-3 times a year

Therefore the following Table is a guide to Maintenance costs for the firtst 7 years which entails weeding and fertilising the trees per Rai ( 80 Trees Per Rai)

Therefore ignoring any Initial  Land Purchase & Land Clearing costs  which is dependent upon the number of Rai you purchase it will cost approx 16,110 Baht /Rai  before you start to see any returns.

Therefore if you have 50 Rai ( 4,000 Trees) it will cost you approximately 800,000 Baht minimum but realistically it will probably cost you closer to a million baht once you have paid for the collection cups, Accommodation, Electricity , etc etc.

Yields

This is the contentious area but the best reliable source is the Office of Agricultural Economics. provided by the Thailand agriculture department.

Remark : , ** August 2010

See here for latest 2010 figures

It can be argued that the above figures include older trees producing a lower than the new trees . But if you look over the 9 year period yields have remained relativley constant and during this time new trees must have come into production and old ones removed.

By Comparison Indonesian Yields
828 kg per hectare a year on the average, Which equates to 134 kg/Rai which is a lot lower than Thai Yields

Selling

We sell at the gate and therfore get Gate price for our rubber. Although the price is slighly lower most small to medium sized plantations opt to sell in this manner to save on transportation costs.

The rubber is weighed and once a price has been agreed the buyer loads it up and takes it away.

You can opt to take it to take it to the main buyers themselves but this means frequent trips to town and the additional expense of transporting it.