Too Much Money Can Be Dangerous, Too!

In farming, too much money can be dangerous, too. We just came from a lunch date with a friend who is successful in commercially producing organic fertilizer. He also has his own farm where he produces hot pepper, black pepper, and a number of other crops and farm animals.

He told us about the story of a young former congressman who planted six hectares to hot chili after learning that the hot pepper sells for as much as P400 to P500 per kilo. (Actually, though, the price could even escalate to more than a thousand pesos per kilo when supply is very scarce.)

Because the ex-congressman had a lot of money, he did not mind spending big sums of money in preparing the land, money to buy the seeds and the manpower to take care of the plants, the fertilizers and pesticides. To the misfortune of the politician, when he was already harvesting, the going price was only P15 per kilo, according to our informant.  At that price, it was a losing proposition. A big losing proposition.

When the price did not improve after quite sometime, the congressman was so frustrated. He just  abandoned the project  because if he would continue to spend for the workers and other inputs, he surmised he would be incurring more losses, big losses.

THE LESSONS HERE – Just because you have a lot of money, don’t just jump into an agribusiness you have  heard to be profitable. Make a careful study of the market, the nature of the demand for the crop you choose to produce. And it is wise to start more modestly, especially if one is new in the business. Six hectares for a hot chili is too big for a neophyte hot chili farmer, especially if he has no  arrangement with a sure buyer. We think starting with a hectare would be more prudent. From there he could expand  if his experience will warrant.

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One thought on “Too Much Money Can Be Dangerous, Too!

  1. Okay lang po siguro yon for the young congressman – he provided jobs, lost a fraction of his riches, produced chilli peppers that people enjoyed for a low price. That’s a common story. Ako nga, 3 piso lang ang benta ng papaya and I worked on planting them myself. The seeds which I purchased (Ramgo, East West) Red Royale, Red Lady, and Sinta, were approximately 8 pesos per seed. O yan. E di tunganga ako walang pera. I just gifted the papayas to my mother and turned some of them into atchara. Bottom line is, agriculture in the Philippines will not make you lots of money. It’s a sacrifice. The only ones who get rich from agri are the people who know the people who know how to get government subsidies through gov’s agricultural projects as financed by those pork barrel funds. One nearby tomato plantation here in Lipa City was recently acquired by Ayala (highly probable gossip) – no, they are not entering agri here. They want to turn the land into residential subdivision. O yun, money in lupa…

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