A FINANCIAL COMPARATIVE ANALYSIS BETWEEN PARA RUBBER FARMING AND OIL PALM FARMING IN TAMBON THA UTHAE, AMPHOE KANCHANANADIT, CHANGWAT SURAT THANI

Kamolchanok Khaengmak and Somsak Priebprom Author-Email : -
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Somsak Priebprom Author-Email : -: Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand

No 201602, Working Papers from Kasetsart University, Department of Agricultural and Resource Economics

Abstract: This study aimed to do a financial comparative analysis between para rubber farming and oil palm farming in Tambon Tha Uthae, Amphoe Kanchanadit, Changwat Surat Thani. The study was based on a total sample size of 60 small farm households composing of 30 holders of para rubber farms and 30 holders of oil palm farms. An average size of 11 rai farm was chosen for financial analysis and comparison at a given discount rate of 2.25% per annum covering 25 years of the investment period with the 3 financially feasible measures, namely NPV (net present value), BCR (benefit-cost ratio) and IRR (internal rate of return). The analytical results indicated that both para rubber and oil palm farming investment were commercially worthwhile as their NPV, BCR and IRR were positive, greater than 1, and greater than the opportunity cost of capital, respectively. When comparing returns between para rubber farming and oil palm farming, the net benefit or NPV of oil palm farming was over the para rubber farming. This research concluded that in order to change the para rubber farming, oil palm farming is one of the feasible alternatives that can replace it. However, if the price of oil palm dropped below 3.24 baht per kilogram, oil palm farming investment was not worth the investment

Keywords: Financial Analysis; Para Rubber and Oil Palm Farming (search for similar items in EconPapers)
JEL-codes: D61 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016-11
New Economics Papers: this item is included in nep-sea
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Published in ARE Working Paper No. 2559/2 (November 2016)

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